Experts Discuss Dangote's Initiative on Economic Growth

Economists, financial analysts, and energy experts have resoundingly praised Dangote Petroleum Refinery's initiative to distribute petrol and diesel to marketers and dealers at no cost, hailing it as a transformative development for Nigeria's energy sector and economy. This groundbreaking move is expected to alleviate inflationary pressures, reduce production costs, and stimulate significant economic growth across the nation. Many have described it as the most impactful event in the energy sector since Nigeria's independence.
Bismarck Rewane, Chief Executive of Financial Derivatives Company, underscored two primary objectives of Dangote's strategy: ensuring a uniform product price nationwide by eliminating bridging costs, and drastically cutting logistics expenses through the deployment of Compressed Natural Gas (CNG)-powered trucks. He asserted that Dangote is effectively bypassing the traditional, often 'parasitic' role of middlemen who extract margins without substantial investment, by directly handling distribution and offering credit facilities to retail businesses. Rewane also dismissed concerns about the refinery establishing a monopoly, emphasizing that the sector's inefficiencies have been systemic and long-standing.
Energy expert Kelvin Emmanuel, co-founder of Dairy Hills, highlighted that Dangote's decision to absorb logistics costs marks a pivotal moment, finally allowing Nigerians to fully benefit from local refining capabilities. Energy analyst Ibukun Phillips described the initiative as "revolutionary," suggesting its potential to reshape Nigeria's energy landscape by enhancing affordability and accessibility, especially for rural communities who typically face higher costs despite lower earnings. This could also lead to the revival of abandoned filling stations and foster more equitable fuel distribution.
The Independent Petroleum Marketers Association of Nigeria (IPMAN) also lauded the development, recognizing it as a timely solution to persistent challenges in the downstream sector. IPMAN’s National Publicity Secretary, Chinedu Ukadike, noted that this new model will significantly ease logistical burdens for independent marketers by delivering more affordable fuel directly to filling stations, a crucial intervention given years of non-functional pipelines that forced reliance on expensive transport from coastal depots.
To facilitate this initiative, Dangote Petroleum Refinery has made a substantial investment of over N720 billion in acquiring 4,000 brand-new CNG-powered trucks and establishing a network of nationwide CNG 'mother and daughter' stations. This strategic program is projected to save Nigerians over N1.7 trillion annually and will see the refinery absorb more than N1.07 trillion yearly in fuel distribution costs. The benefits extend to over 42 million Micro, Small, and Medium Enterprises (MSMEs), which will experience reduced energy costs and improved profitability. The direct delivery of petrol and diesel to filling stations, industrial facilities, and high-volume consumers commenced on August 15, 2025. This move aims to meet Nigeria’s daily consumption needs, which include 45 million litres of Premium Motor Spirit (PMS), 15 million litres of diesel, and 5 million litres of aviation fuel.
Beyond economic advantages, the initiative is also expected to resuscitate dormant filling stations, fostering job creation with projections of over 15,000 direct jobs across the logistics chain, including drivers, station managers, and attendants at CNG stations. The refinery further emphasized that this program will help curb cross-border smuggling of petroleum products and promote a more efficient and environmentally friendly distribution system. In a related development, Dangote Petroleum Refinery recently announced a reduction in its ex-depot price of petrol from N880 to N840 per litre, effective last Monday. This price adjustment followed an easing of the Middle East conflict between Israel and Iran, which led to a drop in global oil prices. Filling stations with special agreements with Dangote Refinery, such as MRS Oil & Gas, Ardova Plc, and Heyden, are anticipated to reflect this reduction by lowering their pump prices to below N900. Additionally, the refinery has offered a credit facility for purchasers of a minimum of 500,000 litres, allowing them to obtain an additional 500,000 litres on credit for two weeks under a bank guarantee.