The Dangote Petroleum Refinery and Petrochemicals has expanded its free fuel delivery initiative to include Kano, Imo, Anambra, and Nasarawa states.
Initially covering Lagos, Ogun, Rivers, Kaduna, Abuja, and Delta, the program is designed to lower distribution costs for independent petroleum marketers and create room for lower pump prices.
Under the arrangement, the refinery absorbs the shipping costs to designated locations, effectively reducing long-distance transportation expenses while bringing products closer to marketers and retailers.
According to Fatima Aliko Dangote, Group Executive Director of Commercial Operations, Oil & Gas, WAEP, and Fertiliser, the project was designed to ensure that the advantages of local refining translate directly into tangible savings for both businesses and consumers.
“The value of domestic refining must ultimately be felt beyond the refinery gate. By absorbing the cost of delivering petroleum products to our customers, we are removing a significant component of the distribution burden and creating room for those savings to flow through the value chain to consumers,” she said.
According to Dangote, the company’s objectives were to increase fuel distribution efficiency, eliminate unnecessary expenses, and promote more competitive pump pricing nationwide.
The Independent Petroleum Marketers Association of Nigeria (IPMAN) applauded the initiative, stating that it would alleviate some of the logistical and financial difficulties independent marketers face.
Chinedu Ukadike, IPMAN National Publicity Secretary and Public Relations Officer, noted that marketers frequently spend large sums of money on petroleum products and often face delays of days or weeks waiting for orders to be loaded and dispatched.
He added that the free delivery arrangement would enhance cash flow, reduce the duration for which marketers’ capital remains tied up, and enable them to allocate their resources more effectively.
The significance
This free fuel delivery initiative is especially critical for marketers operating in regions far from the refinery, where long-distance haulage, vehicle maintenance, insurance, driver fees, and transit hazards significantly increase transportation costs.
By positioning products closer to destination markets, the framework helps streamline the supply chain, boost distribution efficiency, and mitigate operational risks linked to long-haul transport.
Commending the refinery’s effort, Ukadike urged Dangote Refinery to expand the program to additional regions across the country, particularly throughout the northern states.
He explained the development as a useful result of liberalisation and competition in Nigeria’s downstream petroleum industry.
The growth coincides with Nigeria’s downstream industry’s ongoing adaptation to a more competitive market and increasing local refining capacity.
With a nameplate capacity of 650,000 barrels per day, Dangote Petroleum Refinery has been supplying refined petroleum products to both domestic and international markets.
The refinery’s expanding position in the downstream industry is given a distribution-cost dimension by the free delivery plan, which might benefit consumers and marketers if the savings are transferred to the pump.
Backstory…
The move also comes as Nigeria’s downstream sector adjusts to growing domestic refining capacity and the shift away from reliance on imported petroleum products.
Industry representatives have welcomed the initiative, saying lower logistics costs could improve marketers’ cash flow and reduce some of the expenses built into fuel distribution.
However, the savings will not automatically translate into an equal reduction at filling stations, as pump prices also depend on the refinery’s selling price, exchange rates, financing costs and marketers’ margins.
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