With less than 30 days to the planned rollout of 4,000 Compressed Natural Gas (CNG) trucks by the Dangote Refinery and Petrochemical Limited, Nigeria’s petroleum downstream sector is already witnessing a strategic shift. Marketers are swiftly aligning with the new distribution model, while concerns mount among transport stakeholders about the ripple effect on jobs and competition.
From a modest three initial participants, the number of petroleum marketers that have signed up with the refinery for direct product supply has climbed to 25 as of Friday, marking a significant momentum toward a centralized supply chain model.
Fueling a New Distribution Era
The Dangote Refinery had earlier revealed its intention to bypass traditional third-party logistics by distributing Premium Motor Spirit (PMS), diesel, and aviation fuel directly to retail outlets, telecom companies, manufacturers, and airlines. This bold move—effective August 15—signals a substantial disruption of Nigeria’s conventional fuel distribution chain, long dominated by independent transporters and depot operators.
An executive within Dangote Group, who asked not to be named, confirmed the growing number of partners and revealed that the refinery was finalizing plans to deploy its nationwide truck fleet.
“Yes, more marketers are now registering with us ahead of the planned free distribution of petroleum products using 4,000 trucks. We started with three partners but now, it has jumped to 25,” the official disclosed.
The refinery says the goal is to ensure nationwide availability of refined fuel, reduce dependency on imported petroleum products, and stabilize retail pricing, particularly in regions like northern Nigeria that often suffer from supply delays and price disparities.
Market Monopoly or Strategic Necessity?
Despite growing alignment among marketers, some industry leaders have raised the alarm over a looming market monopoly. The Independent Petroleum Marketers Association of Nigeria (IPMAN), while confirming its members' participation in the new scheme, warned of limited alternatives.
“We don’t have any option. Dangote has become the only supplier of petroleum products in Nigeria and West Africa,” said Chinedu Ukadike, IPMAN’s National Publicity Secretary. “Most of us are ready to collaborate. Marketers have applied to benefit from the free distribution scheme.”
He noted that economic realities—including high fuel costs and unsold inventories—were driving marketers into alignment.
“Sometimes, we don’t even finish one truck of petroleum product in a month. But the running costs remain. Salaries have to be paid regardless.”
Ukadike, however, stressed the need for competition, urging the federal government to expedite the activation of other refineries—especially public ones—to avoid overdependence on a single operator.
“We simply don’t have any choice. But we won’t starve Nigerians,” he added.
Truck Drivers in Limbo
While marketers are preparing to embrace Dangote’s logistical offer, tanker drivers—a critical backbone of Nigeria’s petroleum distribution—are increasingly anxious about their future.
Many fear that the free delivery model, backed by Dangote’s expansive truck fleet, may lead to widespread job losses, especially among independent drivers and private fleet owners.
Most current distribution is already routed through the Dangote refinery’s gantries, but industry watchers say a full-scale shift to Dangote-owned transport may lead marketers to shelve their own trucks to minimize logistics costs.
“Some of the marketers may need to park their trucks to enjoy free delivery,” an analyst noted.
The National Association of Road Transport Owners (NARTO), which represents many of these drivers, is reportedly in closed-door consultations.
“I’m not going to say anything about it because we are in discussion,” said Yusuf Othman, NARTO’s National President. “The discussion is with the stakeholders generally.”
Suppliers and Associations Mobilize
In response to mounting concerns, the Natural Oil and Gas Suppliers Association of Nigeria (NOGASA) has scheduled a National Executive Council (NEC) meeting for July 31, 2025, in Abuja to deliberate the potential fallout of the Dangote distribution model.
A circular signed by NOGASA’s Secretary-General, Tunde David, confirmed the meeting was called following consultation with the association’s President, Benneth Korie.
“Notice is hereby given for the holding of the association’s NEC meeting on Thursday, 31st July, 2025, at Chida Hotel, Jabi, Abuja, by 10 a.m.”
PETROAN Sounds Alarm Over ‘Greek Gift’
Meanwhile, the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has issued a strong caution against what it described as a “Greek gift.”
Billy-Gillis Harry, PETROAN’s National President, compared the development to previous market consolidations in Nigeria’s cement, sugar, and flour industries, arguing that while short-term relief may be visible, the long-term impact could be inflationary.
“We’ve seen this play out before. At first, it looks like relief, but eventually, prices rise sharply after competition is eliminated,” he said.
“There is no anticipation that when everybody is drummed out of business by these kinds of gifts, we wouldn’t get back to the same position where we would start looking to buy petroleum products for N2,500 per litre.”
A Refinery on the Rise
Since its commissioning in January 2024, the 650,000 barrels-per-day Dangote Refinery has emerged as a transformative player in Nigeria’s oil sector. It initially began with diesel and aviation fuel (Jet A1), followed by PMS rollout in September 2024.
By February 2025, the refinery reported operations at 85 percent of its installed capacity, and officials remain optimistic about hitting full capacity within months.
Final Outlook: Balancing Scale with Fairness
As the countdown to August 15 continues, the Dangote refinery’s direct-to-marketer model is being hailed by some as a logistics breakthrough and economic game-changer. Yet, it is equally viewed with skepticism by those who fear the erosion of jobs, choice, and market balance.
Whether this shift ushers in a more efficient downstream sector—or merely consolidates power in fewer hands—will depend on how stakeholders, regulators, and competitors respond in the coming months.