Dangote Refinery to Slash Fuel Distribution Cost

The Dangote Petroleum Refinery has revealed plans to absorb over N1.07 trillion annually in
fuel distribution costs as part of its strategy to supply products directly to marketers
nationwide. To support this initiative, the company has invested more than N720 billion in the
deployment of 4,000 Compressed Natural Gas (CNG)-powered trucks, aimed at cutting
distribution costs and saving Nigerians over N1.7 trillion each year.
“This ambitious move will see the privately-owned refinery take on more than N1.07 trillion in
annual logistics expenses,” the company said in a statement on Sunday. “It will also
positively impact over 42 million Micro, Small, and Medium Enterprises by reducing energy
costs and boosting profitability.
The initiative is expected to eliminate fuel transportation costs for marketers and large
consumers, ultimately contributing to lower pump prices and helping to curb inflation.
Starting August 15, Dangote announced it will begin direct delivery of petrol and diesel to
filling stations, industrial sites, and other major consumers.
According to the company, the goal is to meet Nigeria’s daily demand of 65 million litres of
refined petroleum products comprising 45 million litres of Premium Motor Spirit (petrol), 15
million litres of diesel, and 5 million litres of aviation fuel.
The company stated that with average logistics costs estimated at N45 per litre, the refinery
will bear over N1.07 trillion annually in distribution expenses at no cost to fuel marketers. It
added that the Dangote Group is investing N720 billion in acquiring 4,000 CNG-powered
trucks and setting up CNG ‘mother and daughter’ stations across the country, along with
other infrastructure to support the free distribution initiative.
The company added that the programme is part of Dangote’s wider commitment to
addressing logistics challenges, improving energy efficiency, advancing environmental
sustainability, and driving Nigeria’s economic growth.
It emphasized that reducing fuel distribution costs would help lower production expenses,
ease inflation, and boost overall economic activity.
“The initiative is also expected to revive inactive filling stations, creating employment
opportunities in the process. More than 15,000 direct jobs are projected across the logistics
chain, including positions for drivers, station managers, and attendants at the CNG stations,”
the statement noted.