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    HomeEditorialDangote’s new deal, a welcome development

    Dangote’s new deal, a welcome development

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    Since the Dangote Refinery officially commenced production on Friday, January 12, 2024, the owners of Africa’s largest, 650,000 barrel-per-day venture have left no one in doubt that the refinery would be a game changer for Nigeria.

    Although the largest single-train refinery in the world was initially scheduled to begin operations in June 2023, it received its first crude oil deliveries in late 2023, which paved the way for the start of production the following January.

    The $20 billion venture has since keyed into the Renewed Hope Agenda of the President Bola Ahmed Tinubu’s government by offering the much-needed answer to persistent and costly fuel importation.

    On June 17, 2025, the Dangote Refinery delivered another masterstroke, a decision that has shaken the downstream sector to the marrow.

    That day, the company announced its readiness to deploy 4,000 CNG (compressed natural gas) Tankers for distribution of PMS and diesel nationwide. The plan, it added, is open to marketers, petrol dealers, manufacturers, telecommunication firms, aviation and other large users.

    Said the company: “Dangote Petroleum Refinery is pleased to announce the commencement of a significant national initiative designed to transform Nigeria’s fuel distribution landscape.

    “Effective 15th of August 2025, the Refinery will begin the distribution of Premium Motor Spirit (PMS) and diesel to marketers, petrol dealers, manufacturers, telecoms firms, aviation, and other large users across the country, with free logistics to boost distribution network.

    “To ensure smooth take-off of this scheme, Dangote Refinery has invested in the procurement of 4,000 brand-new Compressed Natural Gas (CNG)-powered tankers. This phase of the programme will continue over an extended timeframe. The refinery is also investing in Compressed Natural Gas (CNG) stations, commonly referred to as daughter booster stations, supported by a fleet of over 100 CNG tankers across the country to ensure seamless product distribution.

    “This strategic programme is part of our broader commitment to eliminating logistics costs, enhancing energy efficiency, promoting sustainability and supporting Nigeria’s economic development. It affirms our dedication to improving the availability and affordability of fuel, in support of broader efforts to strengthen the economy and improve the well-being of all Nigerians.

    “Under this initiative, all petrol stations purchasing PMS and diesel from the Dangote Petroleum Refinery will benefit from this enhanced logistics support. Key sectors such as manufacturing, telecommunications, and others will also gain from this transformative initiative, as reduced fuel costs will contribute to lower production costs, reduced inflation, and foster economic growth. Players in these key sectors and others can purchase directly from the Dangote Petroleum Refinery.

    “In addition, the refinery will offer a credit facility to those purchasing a minimum of 500,000 litres – allowing them to obtain an additional 500,000 litres on credit for two weeks, under bank guarantee.

    “This pioneering effort marks a major milestone in our vision to revolutionise Nigeria’s energy sector. Dangote Refinery is dedicated to ensuring that no place is left behind. Our goal is to provide equitable access to affordable fuel for all Nigerians, regardless of location, making energy more accessible and sustainable for everyone, wherever they may be.”

    According to the Refinery, the plan will revitalise previously inactive petrol stations, thereby driving job creation, stimulating small and medium-sized enterprises (SMEs), increasing government revenue, improving fuel access in rural and underserved communities, and strengthening investor confidence in Nigeria’s downstream petroleum sector.

    We salute this courage to address the supply chain in the downstream sector, despite misgivings by the Petroleum Retail Outlets Owners Association of Nigeria, PETROAN, that the policy could lead to job losses and place Dangote in a monopoly-like position.

    PETROAN argued that the Dangote Refinery should not operate as a distributor in the downstream sector. It added that it had previously raised the alarm about Dangote’s intentions to dominate the downstream sector, citing concerns that “the company may leverage its market power to fix prices, limit competition, and exploit consumers, much like it has done in other sectors.”

    But we believe that Dangote Refinery’s efforts, rather than stifle the industry, have brought great relief to Nigerians who over the years have totally depended on imported petrol, with all the attendant negative impacts as they could not hold importers down to specifics on quality, volume and even value of subsidy.

    Rather than castigate these laudable steps of the fledgling Dangote Refinery, we call on all marketers to key into the plan and explore how to stay afloat in business as opposed to smiling to the banks with unearned billions of naira as obtained in years past.

     

     

    “…we believe that Dangote Refinery’s efforts, rather than stifle the industry, have brought great relief to Nigerians who over the years have totally depended on imported petrol, with all the attendant negative impacts as they could not hold importers down to specifics on quality, volume and even value of subsidy.”

     

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