Dangote Refinery is set to launch its Compressed Natural Gas (CNG) trucks today, marking the commencement of nationwide distribution of Premium Motor Spirit (PMS). The refinery received the first batch of its 4000 CNG-powered trucks in August, with the aim of reducing dependency on third-party carriers for fuel distribution in Nigeria. This move is seen as a strategic choice and a national imperative, according to Aliko Dangote.
The decision to adopt direct fuel distribution is expected to lower logistics costs and reduce the environmental impact of fuel distribution. The 4000 CNG truck project represents an investment of over N720 billion and aims to benefit over 42 million micro, small, and medium enterprises (MSMEs) by lowering energy costs. The trucks will use CNG supplied by local partner Tetracore Energy Group and are designed to transport refined products directly from the refinery.
The Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) had earlier accused the refinery of offering lower prices to international buyers while quoting higher rates to local off-takers. However, Dangote Refinery responded by stating that it decided to jettison the Single Point Mooring (SPM) system for fuel distribution to avoid extra costs. The SPM system would have added N75 per litre in handling charges, translating to N1.5 trillion annually.
By utilizing gantry loading and direct trucking, the refinery aims to eliminate these costs entirely, resulting in substantial savings that could be redirected towards critical infrastructure investments. The refinery’s decision is seen as a move to partner with credible distributors and expand humanitarian outreach, ensuring that petroleum products get to the Nigerian people transparently and affordably.
The launch of the CNG trucks is a significant development in Nigeria’s petroleum industry, with the potential to impact the country’s energy landscape. As the refinery begins its nationwide distribution of PMS, it is expected to increase the availability of petroleum products and reduce costs for consumers. The success of this initiative will be closely watched, and its impact on the industry will be assessed in the coming months.
