*Energy experts speak on Dangote Petroleum Refinery’s proposed free distribution of products to big-time corporate consumers across Nigeria

Isola Moses | 绿帽献妻

Dangote Petroleum Refinery’s recent initiative in the downstream petroleum sector has continued to draw accolades from energy experts in the country.

Some have described the fuel distribution scheme to big-time corporate energy consumers as the best that has happened to the sector since Nigeria Independence.

Dangote Group stated Bismarck Rewane, Chief Executive Officer (CEO) of Financial Derivatives Company Limited, said the company鈥檚 free distribution initiative would reduce production costs, ease inflationary pressures, and stimulate economic growth.

Rewane dismissed concerns about the refinery becoming a monopoly.

He argued that inefficiencies in the sector have been systemic and long-standing.

The expert noted the scheme would help to curb the parasitic role traditionally played by middlemen in the downstream petroleum sector.

Dangote quoted Rewane as saying: “What Dangote is doing achieves two key objectives: delivering products across the entire country at a uniform price by eliminating bridging costs and significantly reducing logistics expenses through the use of CNG-powered trucks to reach every corner of the nation.

鈥淚n economic terms, middlemen鈥攚ho typically do not invest鈥攁re often viewed as parasitic, extracting margins simply for distributing goods. “Dangote is bypassing this layer by directly handling distribution and, notably, providing credit facilities to the retail end of the business.”

Kelvin Emmanuel, energy expert and Co-founder of Dairy Hills, also said Dangote鈥檚 decision to absorb logistics costs marks a turning point that could finally allow Nigerians to enjoy the benefits of local refining.

Likewise, energy analyst Ibukun Phillips described the move as 鈥渞evolutionary鈥�, suggesting it could reshape Nigeria鈥檚 energy sector by improving affordability and access, particularly in rural communities.

Phillips stated: 鈥淩ural consumers, who typically pay more despite earning less, stand to benefit immensely.

“This could also revive abandoned filling stations and promote equitable distribution.”

Similarly, the Independent Petroleum Marketers Association of Nigeria (IPMAN) also commended the development, calling it a timely resolution to longstanding challenges in the downstream sector.

Chinedu Ukadike, IPMAN鈥檚 National Publicity Secretary, stated that the new model would significantly reduce logistical burdens for independent marketers by delivering more affordable fuel directly to filling stations.

He also said: 鈥淥ur pipelines have been non-functional for years, yet nothing has been done to revive the infrastructure linking the country鈥檚 21 depots.

“We’ve had to rely on expensive transport from coastal depots.

鈥淒angote鈥檚 intervention lifts a huge burden off the shoulders of independent marketers.鈥�

It is recalled that Dangote Petroleum Refinery recently invested over N720 billion to implement its landmark initiative of deploying 4,000 Compressed Natural Gas (CNG)-powered trucks for the nationwide distribution of petroleum products, which is expected to save Nigerians over N1.7 trillion annually.

According to Dangote, this bold step will see the privately-owned refinery absorb over N1.07 trillion annually in fuel distribution costs.

The initiative is also expected to significantly benefit over 42 million Micro, Small, and Medium Enterprises (MSMEs) by reducing energy costs and enhancing profitability.

The Dangote Refinery stated the initiative, which eliminates transportation costs for fuel marketers and large-scale consumers, is expected to help reduce pump prices and inflation.

From 15 August, Dangote will begin the direct delivery of petrol and diesel to filling stations, industrial facilities, and other high-volume consumers in Nigeria.

The Refinery disclosed in a statement that it aims to meet Nigeria鈥檚 daily consumption of 65 million litres of refined petroleum products.

This includes 45 million litres of Premium Motor Spirit (PMS), 15 million litres of diesel, and 5 million litres of aviation fuel.

With the average logistics cost estimated at N45 per liter, the refinery will incur over N1.07 Trillion annually in free distribution expenses.

Dangote Group is investing N720 billion in the acquisition of 4,000 CNG-powered trucks as well as the establishment of nationwide CNG 鈥榤other and daughter鈥� stations, among other infrastructure to implement the free distribution initiative.

It stated the strategic programme forms part of Dangote鈥檚 broader commitment to eliminating logistics bottlenecks, enhancing energy efficiency, promoting environmental sustainability, and supporting Nigeria鈥檚 economic development. The company also noted that lower fuel distribution costs would help to reduce production costs, ease inflationary pressures, and stimulate economic growth.

The initiative is also expected to resuscitate dormant filling stations, fostering job creation in the process, the company stated.

Over 15,000 direct jobs are projected to be created across the logistics chain, including drivers, station managers, and attendants at the CNG stations.

The refinery also emphasised that this programme would help curb cross-border smuggling of petroleum products and support a more efficient and environmentally friendly distribution system.

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