Dangote refinery: Nationwide fuel distribution will save Nigerians over N1.7trn yearly

The Dangote Petroleum Refinery says its nationwide petroleum products distribution scheme will save Nigerians over N1.7 trillion annually.

On June 15, the refinery said it will begin the nationwide distribution of diesel and premium motor spirit (PMS), also known as petrol, on August 15.

Providing updates in a statement on Sunday, the refinery said Dangote Group has invested over N720 billion in 4,000 compressed natural gas (CNG)-powered trucks for the distribution.

According to the company, the initiative will result in the refinery absorbing over N1.07 trillion annually in fuel distribution costs.

“The initiative is also poised to significantly benefit over 42 million Micro, Small and Medium Enterprises (MSMEs) by reducing energy costs and enhancing profitability,” the statement reads.

“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.

“With the average logistics cost estimated at N45 per litre, the refinery will cover over N1.07trn 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 ‘mother and daughter’ stations, among other infrastructure to implement the free distribution initiative.”

The conglomerate added that the scheme aims to meet Nigeria’s daily consumption of 65 million litres of petroleum products, which includes 45 million litres of PMS, 15 million litres of diesel, and 5 million litres of aviation fuel.

“This strategic programme forms part of Dangote’s broader commitment to eliminating logistics bottlenecks, enhancing energy efficiency, promoting environmental sustainability, and supporting Nigeria’s economic development,” the group said.

The company said lower fuel distribution costs will help reduce production costs, ease inflationary pressures, and stimulate economic growth.

The statement added that the distribution plan is expected to resuscitate dormant filling stations, fostering job creation.

“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 statement said.

The conglomerate also said the programme would help curb cross-border smuggling of petroleum products and support a more efficient and environmentally friendly distribution system.

PRESIDENCY, EXPERTS COMMEND INITIATIVE

The Dangote Group said the presidency and other experts have praised the initiative.

According to the group, the presidency described the initiative as a pivotal moment in the federal government’s push to mainstream gas-powered transportation.

The company said Tosin Coker, commercial coordinator of the presidential compressed natural gas Initiative (PCNGi), praised the move as a strong vote of confidence in Nigeria’s gas-fuelled future.

“Dangote Group’s acquisition of 4,000 CNG trucks is not only impressive in scale but also highly strategic,” he was quoted as saying.

“It signals to the market that CNG is no longer a distant prospect but a current, practical solution to high energy costs, emissions, and supply chain challenges.

“PCNGI regards this as a milestone achievement in our efforts to accelerate gas-powered transport adoption.”

The company said the Independent Petroleum Marketers Association of Nigeria (IPMAN) also commended the development, describing it as a timely resolution to longstanding challenges in the downstream sector.

According to the conglomerate, Chinedu Ukadike, IPMAN’s national publicity secretary, said the new model would significantly reduce logistical burdens for independent marketers by delivering more affordable fuel directly to filling stations.

“Our pipelines have been non-functional for years, yet nothing has been done to revive the infrastructure linking the country’s 21 depots. We’ve had to rely on expensive transport from coastal depots,” Ukadike said.

“Dangote’s intervention lifts a huge burden off the shoulders of independent marketers.”

Ken Ife, development economist and policy analyst, said the initiative would drive down the price of PMS and yield widespread benefits for Nigerians.

Also quoted in the statement, Bismarck Rewane, chief executive officer (CEO) of Financial Derivatives Company, dismissed concerns about the refinery becoming a monopoly, arguing that inefficiencies in the sector have been systemic and long-standing.

He added that the scheme would help curb the parasitic role traditionally played by middlemen.

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