Dangote Refinery’s Transport-free Deliveries of Fuel Will Reduce Inflation, Create Jobs –Analysts

A recent initiative by the Dangote Petroleum Refinery, which includes the distribution of Premium Motor Spirit (PMS) and diesel to marketers, petrol dealers, manufacturers, telecommunications companies, the aviation sector, and other large-scale users across the country, with free logistics support to enhance the distribution network, has the potential to reduce inflation, create employment opportunities, and lower the prices of petroleum products. 

Experts said that the refinery’s decision to deploy 4,000 brand-new Compressed Natural Gas (CNG)-powered tankers could also dismantle the monopoly held by intermediaries and contribute to a cleaner environment.

Dr Abimbola Oyarinu, a university lecturer and public affairs analyst, stated that if properly implemented, the policy could significantly weaken the grip of middlemen within the oil supply chain.

He pointed out that these intermediaries, including tanker drivers, have, in the past, held the nation to ransom, and the new policy could enable the Dangote Refinery to overcome this longstanding challenge.

However, he emphasised that Nigerians will primarily judge the policy based on its impact on fuel prices and its effect on inflation.

“It will break the monopoly of powerful middlemen, including tanker drivers, who have in the past even held the NNPCL and others to ransom. However, what Nigerians care most about is how it affects them. Let’s wait and see its impact at the pump. If it leads to a decrease in pump prices, it will also help reduce inflation since fuel prices and the exchange rate are two major drivers of inflation in Nigeria,” he said.

Another analyst, Ibukun Phillips, described the move as a “revolution” that will reshape Nigeria’s energy landscape and redefine energy accessibility across the country.

“The benefits are enormous. Logistics account for between 10% and 30% of fuel costs, so removing this burden will naturally lead to a drop in pump prices. Moreover, it will ensure that rural and underserved communities have better access to petroleum products. Many Nigerians are unaware that rural dwellers often pay more for fuel than those in urban areas, despite earning significantly less. This initiative could revive moribund filling stations in these communities and offer wide-reaching benefits,” she explained.

She also noted that the project will generate employment, with at least 8,000 drivers expected to be recruited by the Dangote Refinery to launch the initiative.