The Dangote Petroleum Refinery’s decision to distribute its refined products directly to large end-users has ignited fierce backlash from major stakeholders in Nigeria’s oil and gas downstream sector. Stakeholder groups such as the Natural Oil and Gas Suppliers Association of Nigeria (NOGASA) and the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN) have warned that bypassing traditional distribution networks could destabilize the market, displace thousands of workers, and repeat past failures witnessed under government-run refineries.
NOGASA Sounds the Alarm: “Don’t Kill the Ecosystem”
At the heart of the opposition is NOGASA’s National President, Bennett Korie, who, during the association’s Annual General Meeting in Abuja, cautioned against a monopolistic distribution system. Korie urged Dangote Refinery to focus on refining operations and allow licensed marketers and depot owners to handle nationwide distribution as traditionally practiced.
“We are not against the Dangote Refinery. In fact, our association has been one of its biggest supporters,” Korie explained. “But if one company takes over refining, distribution, and retail, we risk collapsing an entire supply chain that has taken decades to build. This is the same pattern that led to the eventual decline of the NNPC’s refineries when they attempted direct retailing.”
Korie emphasized that existing independent marketers, logistics providers, and over 50,000 petrol stations play a critical role in delivering fuel to remote areas. Centralizing this process under a single entity, he warned, would lead to inefficiencies and economic displacement if disruptions occur at the refinery.
Dangote’s Distribution Model and Industry Pushback
The $20 billion Dangote Refinery recently announced plans to roll out 4,000 Compressed Natural Gas (CNG)-powered tankers to distribute petrol and diesel directly to major consumers such as manufacturers, telecoms, aviation firms, and large marketers. The strategy, according to Dangote Group, is aimed at eliminating logistics costs, enhancing fuel efficiency, and saving the country over ₦1.7 trillion annually.
However, the plan has rattled small and mid-sized players in the sector, many of whom view it as a move to dominate every aspect of the petroleum value chain.
Billy Gillis-Harry, President of PETROAN, echoed similar concerns. “You can’t be the refiner, the logistics handler, the retailer, and effectively the regulator all at once,” he said. “Nigerians might be clapping now, but history has shown that monopolies eventually backfire—just look at what happened in the cement industry.”
He warned that independent retailers were already being squeezed by sudden price hikes and profit margins shrinking by up to ₦80 per litre. “If this trend continues, we might see station closures, job losses, and eventually higher pump prices,” he added.
Industry Tensions Escalate as Prices Climb
Amid this brewing conflict, petrol prices at depots jumped from ₦815 per litre to ₦870 in a single day. This came after Dangote Refinery abruptly halted product loading and suspended payments for Premium Motor Spirit (PMS) at its gantry, deepening fears of a looming scarcity.
An internal memo issued by the refinery on Thursday instructed marketers to pause all PMS transactions until further notice. The sudden freeze in allocations followed reports that some importers had begun offering petrol at lower rates than Dangote’s, igniting fresh price competition.
Findings on petroleumprice.ng revealed that six major depots, including NIPCO, Aiteo, and Rainoil, had all adjusted their selling prices upward, with Dangote’s own depot offering a slightly discounted rate at ₦865.
Dangote Responds: “Why the Anger Over Cheaper Fuel?”
A senior official at the Dangote Group, speaking anonymously, expressed shock over the backlash. He dismissed accusations of monopolistic behavior, insisting the refinery’s direct-distribution initiative was intended to benefit Nigerians by cutting out logistics costs.
“Why are they angry that we’re removing the burden of logistics from Nigerians? We're not asking for extra fees or blocking anyone from operating. The market is large enough for everyone to coexist,” the official said.
He also countered claims that the plan would lead to job losses. “4,000 trucks can’t serve 774 local government areas in Nigeria. So why the fear? We need to stop acting anti-progress.”
A Call for Presidential Intervention
NOGASA and PETROAN have called on President Bola Tinubu to mediate the matter before the situation escalates. They advocate for a roundtable discussion involving major stakeholders, including the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), to establish a fair and sustainable distribution model.
“We need regulatory clarity and an inclusive distribution framework. Otherwise, the industry risks imploding under the weight of an avoidable monopoly,” Korie stated.
He reiterated the association’s willingness to collaborate with the Dangote Group, provided that existing distributors are not pushed out of business. “Our members want to survive too. All we’re asking for is inclusion and balance in the system.”
IPMAN: Wait and Watch
Meanwhile, Hammed Fashola, Vice Chairman of the Independent Petroleum Marketers Association of Nigeria (IPMAN), took a more measured stance. While acknowledging the anxiety among suppliers, he urged patience and dialogue.
“There’s a value chain at stake here. Let’s see how things evolve. Dangote, I believe, will eventually engage the relevant stakeholders. But the concern is valid—everyone is fighting to stay relevant in a very competitive business,” Fashola said.
The current standoff between the Dangote Group and key oil marketing associations underscores a deeper tension in Nigeria’s petroleum sector—between innovation and inclusivity, centralization and collaboration. As the refinery’s August 15 rollout date approaches, all eyes are on how the federal government and industry regulators will navigate this potential flashpoint. Without a balanced resolution, the promise of cheap, accessible fuel could come at the cost of widespread industry dislocation.