Business
European Union maintains its commitment to Mali
BRUSSELS – The European Commissioner for Development, Andris Piebalgs, today announced further support for Mali totalling EUR 615 million (following approval by the European Parliament and the Council) under the 11th European Development Fund (EDF) for 2014 to 2020. This new allocation emphasises the European Union’s determination to maintain its support for building peace and economic and social development in Mali.
The new support package will focus on government reform, food security, education and the construction of a road linking Gao and Kidal to the Algerian border, in line with the priorities drawn up by the Malian authorities in their Plan for the Sustainable Recovery of Mali 2013-2014.
The new package was announced during a joint visit to the region by Commissioner Piebalgs, the Secretary-General of the United Nations, Ban Ki-moon, the Chairperson of the African Union Commission, Nkosozana Dlamini-Zuma, the President of the World Bank, Jim Yong Kim, the President of the African Development Bank, Donald Kaberuka, and the European Union’s Special Representative for the Sahel, Michel Reveyrand-de Menthon.
‘Since the political and military crisis of 2012, we have seen the Malian Government’s determination to overcome instability in order to concentrate on the country’s development. The restoration of security is a vital condition for sustainable development in the region. We stand by the Malian authorities in their efforts to implement poverty reduction programmes.’ Mr Piebalgs said
This bilateral support for Mali is part of the EUR 5 billion of aid allocated by the European Union for the Sahel (Mali, Niger, Burkina Faso, Chad, Mauritania and Senegal) for the same 2014-2020 period.
The EUR 615 million comes on top of the sums pledged at the high-level donor conference for development in Mali held in Brussels on 15 May 2013 at which the Malian authorities unveiled their Plan for the Sustainable Recovery of Mali 2013-2014.
Under the 10th EDF, which covers the 2008-2013 period, Mali has benefited from an allocation which has been raised from an initial EUR 533 million to nearly EUR 728 million. To this amount must be added EUR 34 million in thematic instruments and EUR 55 million for regional cooperation. EUR 54 million has been allocated in 2013 as humanitarian aid.
In a move expected to reduce distribution costs for independent petroleum marketers and create room for lower petrol prices at the pump, the Dangote Petroleum Refinery & Petrochemicals (DPRP) has expanded its free petroleum product delivery initiative to Kano, Imo, Anambra and Nasarawa States.
A company statement on Sunday in Lagos, has it that the initiative, which began with deliveries to Lagos, Ogun, Rivers, Kaduna, Abuja and Delta States, is designed to bring petroleum products closer to marketers and retailers while removing the cost of transporting products over long distances from the refinery to various parts of the country. By absorbing the delivery cost, the refinery is reducing one of the key expenses built into the downstream distribution chain.
Group Executive Director, Commercial Operations, Oil & Gas, WAEP and Fertiliser, Fatima Aliko Dangote, said the initiative was designed to ensure that the benefits of domestic refining translate into tangible savings for businesses and consumers. “The value of domestic refining must ultimately be felt beyond the refinery gate. By absorbing the cost of delivering petroleum products to our customers, we are removing a significant component of the distribution burden and creating room for those savings to flow through the value chain to consumers. Our goal is to make fuel distribution more efficient, reduce avoidable costs and support more competitive pump prices across Nigeria.”
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The expansion has been welcomed by the Independent Petroleum Marketers Association of Nigeria (IPMAN), which said the initiative would significantly reduce some of the financial and logistical pressures confronting independent marketers and contribute to lower prices for consumers.
National Publicity Secretary and Public Relations Officer of IPMAN, Chinedu Ukadike, said the initiative addresses a longstanding challenge in the petroleum products distribution chain, where marketers commit substantial funds to product purchases and may then have to wait for extended periods before their orders are loaded and transported.
“This gesture, if sustained, will be able to alleviate the sufferings of independent marketers,” Ukadike said. “There has been the issue of financial hold-up, whereby marketers pay for products and are not loaded for days and weeks, and they suffer unnecessary hardship bringing the product down.”
According to him, the refinery’s delivery arrangement reduces the period for which marketers’ funds remain tied up, improves cash flow and allows businesses to deploy their capital more efficiently.
“This time around, Dangote has made it very, very easy for marketers. Marketers are jubilating, and you will see the return on investment as an independent marketer. Your money will not be tied down,” he said.
Ukadike said the initiative could also have a direct impact on pump prices because transportation represents a cost that ultimately forms part of the price paid by consumers.
“You also have less risk, and you have petroleum products at your doorstep. Other consumers will also see that our pump price will not continue to go up. The more Dangote brings down its pump price, the more independent marketers will bring down theirs,” he said.
The reduction in distribution costs is particularly significant for marketers serving locations far from the refinery. Under conventional distribution arrangements, petroleum products transported over long distances incur additional costs associated with haulage, vehicle operations, driver expenses, insurance, road risks and other logistics. Removing or reducing these costs can improve the economics of supplying those markets and create greater scope for competitive retail pricing.
The initiative also reduces the operational risks associated with moving large volumes of petroleum products over long distances. By taking products closer to their destination markets, the refinery is helping to shorten the supply chain and improve the reliability and efficiency of product distribution.
Ukadike commended the management of Dangote Refinery for the initiative and urged the company to extend the programme to more locations across the country, particularly in the northern states, to promote wider access to competitively priced petroleum products.
He described the development as a practical demonstration of the benefits of competition and deregulation in Nigeria’s downstream petroleum sector.
“This is the beauty of deregulation and competition,” he said.
The expansion comes as Nigeria’s downstream petroleum sector continues to adjust to the growth of domestic refining capacity and a more competitive market environment. The Dangote Petroleum Refinery, with a capacity of 700,000 barrels per day, is increasingly supplying refined petroleum products to the domestic market while also expanding its presence in international markets.
The free delivery initiative adds another dimension to the refinery’s impact on the downstream sector. Beyond increasing domestic supply, the refinery is now taking steps to reduce the cost of moving those products from the refinery to consumers.
For motorists and households, the potential benefit is straightforward: the lower the cost of moving petrol through the supply chain, the great