Dangote’s Petrol Distribution Scheme to Save Nigerians N1.7tn Annually

Dangote Petroleum Refinery has announced that its N720 billion investment in a nationwide petroleum distribution initiative will save Nigerians over N1.7 trillion annually. The project includes the deployment of 4,000 Compressed Natural Gas (CNG)-powered trucks to deliver refined products directly across the country.

According to the Dangote Group, the refinery will absorb over N1.07 trillion each year in logistics costs. By eliminating transportation expenses for marketers and industrial consumers, the initiative is expected to help reduce fuel pump prices and inflation. The company said the scheme will benefit over 42 million Micro, Small, and Medium Enterprises (MSMEs) by reducing energy costs and boosting profitability.

The refinery aims to meet Nigeria’s daily consumption of 65 million litres of refined petroleum products, including petrol, diesel, and aviation fuel. With an average logistics cost of N45 per litre, the free distribution will significantly reduce costs across the supply chain. The presidency has praised the initiative as a pivotal contribution to the government’s gas-powered transport agenda.

The Presidential Compressed Natural Gas Initiative called the Dangote Group’s investment strategic and impactful, stating it signals a shift towards more sustainable energy solutions. The Independent Petroleum Marketers Association of Nigeria also applauded the move, describing it as a solution to years of logistical difficulties caused by non-functional pipelines and costly transportation from coastal depots.

Development experts say the project will drive down PMS prices and bring structural improvements to the downstream sector. Economist Bismarck Rewane added that the initiative would reduce the influence of intermediaries who traditionally inflate prices without adding value. He highlighted the importance of uniform pricing and cost savings via the use of CNG-powered trucks.

The Dangote initiative, by managing end-to-end distribution and extending credit to retailers, aims to enhance efficiency and affordability across the petroleum sector while supporting broader economic goals.