Dangote direct distribution reduces inflation, creates thousands of jobs

Dangote Refinery begins direct fuel distribution to cut pump prices, ease inflation, and create jobs, while reducing logistics costs for marketers

[dropcap]D[/dropcap]angote direct distribution reduces inflation as the refinery launches a scheme to supply fuel directly to marketers and businesses across Nigeria.

Also read: Dangote Refinery partners reduce petrol price to N865 amidst growing competition

In a bold move aimed at curbing rising inflation, creating jobs, and lowering petroleum costs, Dangote Petroleum Refinery has pledged to take over the logistics burden for petrol station operators, manufacturers, aviation, and other bulk users.

Announcing the initiative in a statement on Tuesday, the refinery said it would deploy over 4,000 new CNG-powered tankers, positioning itself to resolve Nigeria’s long-standing fuel distribution problems.

Experts have hailed the decision as transformative, with the potential to restructure the downstream oil sector and revive dormant filling stations, particularly in underserved rural areas.

Despite fears expressed by some industry players that the new system could render tanker drivers and other intermediaries jobless, the refinery emphasised that at least 8,000 drivers would be recruited as part of the nationwide roll-out.

The firm’s plan is expected to cut out the influence of powerful middlemen who have traditionally dictated fuel supply routes and prices.

University lecturer Dr Abimbola Oyarinu noted that intermediaries had historically held the energy sector and the state hostage.

He argued that Nigerians would ultimately judge the initiative by whether it results in lower fuel prices at the pump.

Energy analyst Ibukun Phillips described the initiative as revolutionary. She explained that logistics account for up to 30 per cent of fuel prices, and eliminating this cost would bring substantial relief to consumers.

She added that rural dwellers, who often pay more than urban residents despite earning less, stand to benefit most.

Kelvin Emmanuel, co-founder of Dairy Hills, dismissed fears of monopoly and instead pointed to deep-rooted regulatory and logistical failures that Dangote’s intervention could remedy.

According to him, the refinery’s move to shoulder transportation and storage costs would bypass the bureaucratic hurdles that have stalled efficient distribution for years.

Emmanuel further explained that the scheme could finally allow Nigerians to enjoy the full benefits of local refining, something that has long been promised but never realised.

The Petroleum Products Retail Outlet Owners Association of Nigeria has, however, opposed the plan, warning that it could force small operators out of business.

Nevertheless, many analysts believe the direct-to-marketer model offers a sustainable path to stabilising fuel supply and addressing the economic imbalance between urban and rural regions.

Also read: Aliko Dangote steps down as chairman of Dangote Sugar, Arnold Ekpe takes helm

As fuel costs and exchange rates remain primary inflation drivers in Nigeria, the effectiveness of this initiative could become a critical benchmark for economic recovery efforts in the coming months.

Oreoluwa Ojelabi

Oreoluwa is an accountant and a brand writer with a flair for journalism.