Fuel distribution scheme will create jobs — Dangote refinery

The Dangote Petroleum Refinery has said its plan to distribute Premium Motor Spirit (petrol), diesel and other petroleum products to marketers will cut inflation and create jobs.

 

In a statement on Tuesday, the firm said the distribution of fuel to petrol station operators, manufacturers, telecommunications companies, the aviation sector, and other large-scale users, with free logistics support, was hailed by experts as a move with the potential to reduce inflation, create thousands of jobs, and lower the cost of petroleum products across Nigeria.

 

This is coming amid fears by some marketers that they might lose their jobs if Dangote started the scheme.

 

The refinery said its plan to deploy 4,000 new Compressed Natural Gas (CNG)-powered tankers was expected to not only address the country’s long-standing distribution inefficiencies but also reduce the influence of intermediaries and contribute to environmental sustainability.

 

According to the statement, a university lecturer, Dr Abimbola Oyarinu, stated that if successfully implemented, the policy could significantly reduce the power held by middlemen within the oil and gas distribution chain.

 

Oyarinu had observed that the intermediaries, including tanker drivers, have historically held the sector, and sometimes even the state, to ransom.

 

“This initiative has the potential to dismantle the dominance of powerful middlemen, who have in the past stalled progress and held entities like the NNPCL hostage. However, Nigerians will judge it by its impact on fuel prices. If it leads to cheaper petrol at the pump, it will ease inflation, considering fuel costs and exchange rates are key inflationary drivers in Nigeria,” Oyarinu was quoted.

 

An energy analyst, Ibukun Phillips, reportedly described the move as “revolutionary”, stating that it could reshape Nigeria’s energy landscape by improving accessibility and affordability, especially in rural areas.

 

“Logistics currently account for between 10 per cent and 30 per cent of fuel prices. Eliminating this cost will naturally reduce pump prices. Rural dwellers often pay more for fuel than those in urban areas, despite earning less. This initiative could revive disused filling stations and ensure more equitable distribution,” she explained.

 

Phillips added that the scheme would also generate employment, with at least 8,000 drivers expected to be hired to kickstart the operation.

 

Also, an energy expert and co-founder of Dairy Hills, Kelvin Emmanuel, said Dangote’s move to cover logistics costs marked a critical shift that could allow Nigerians to finally benefit from domestic refining.

 

He “argued that concerns about the refinery becoming a monopoly are misplaced, pointing instead to systemic inefficiencies that have plagued the sector” for decades.

 

He highlighted how “logistical and regulatory failings” have hampered fuel distribution.

 

According to Emmanuel, the Dangote refinery stepped in to address long-standing gaps in Nigeria’s fuel distribution system.

 

He emphasised that fuel supply across the country remains inconsistent, with only Lagos, a few states in the southwest, and Abuja enjoying relatively stable and fair pump prices.

 

“Dangote is taking on the burden of transportation, storage, and bridging costs that should have been streamlined long ago. This is in response to the resistance from vested interests who have tried to frustrate fair and efficient distribution,” he said.

 

He further explained that the refinery’s reliance on road transport was a “strategic” move to bypass infrastructural and bureaucratic bottlenecks.

 

Recalled that the Petroleum Products Retail Outlet Owners Association of Nigeria on Monday rejected Dangote’s direct fuel distribution to marketers, fearing that this could lead to a shutdown of filling stations and job losses for tanker drivers.

 

 

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