Fuel distribution: Dangote refinery to incur N1tn as logistics cost

The Dangote Petroleum Refinery says it will absorb over N1.07tn annually in its plan to distribute fuel directly to marketers nationwide.\

As part of this plan, the company has invested more than ₦720 billion to deploy 4,000 Compressed Natural Gas (CNG)-powered trucks for the nationwide transportation of petroleum products. This move is expected to save Nigerians over ₦1.7 trillion each year.

“This bold step will see the privately-owned refinery absorb over N1.07tn annually in fuel distribution costs. The initiative is also poised to significantly benefit over 42 million Micro, Small and Medium Enterprises by reducing energy costs and enhancing profitability,” the company said in a statement made available to our correspondent on Sunday.

The initiative aims to eliminate transportation costs for fuel marketers and large-scale consumers, which could lead to lower pump prices and help bring down inflation.

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

The company says the goal is to meet the country’s daily demand for 65 million litres of refined petroleum products, including 45 million litres of petrol (PMS), 15 million litres of diesel, and 5 million litres of aviation fuel.

It added that the programme formed part of Dangote’s broader commitment to eliminating logistics bottlenecks, enhancing energy efficiency, promoting environmental sustainability, and supporting Nigeria’s economic development.

The refinery also noted that lower distribution costs would help bring down production expenses, reduce inflationary pressure, and stimulate broader economic growth.

In addition, the direct supply model is expected to curb fuel smuggling across borders and promote a cleaner, more efficient fuel distribution system.