The Nigerian fuel industry is bracing for intense changes as major stakeholders push back against the Dangote Petroleum Refinery’s proposal to bypass established distribution networks and supply petroleum products directly to end-users. The Natural Oil and Gas Suppliers Association of Nigeria (NOGASA) has urgently warned that such a move could lead to widespread supply chain disruptions, enduring scarcity, and potential collapse of independent distribution outlets.
During its Annual General Meeting in Abuja, NOGASA’s President, Bennett Korie, called upon President Bola Tinubu to intervene, asserting that no single entity can sustainably manage the country’s complex distribution demands. “If distribution and retail are handled as a single entity, sustainability becomes impossible,” Korie emphasized, referencing failures in previous attempts by the Nigerian National Petroleum Company Limited (NNPCL).
NOGASA voiced fears that thousands of jobs are at stake, as bypassing middlemen could devastate over 50,000 filling stations nationwide. “Dangote alone cannot shoulder this responsibility—it would be a mistake to sideline the independent marketers who sustain the sector,” Korie stated during the gathering.
Meanwhile, market volatility has increased, with petrol depot prices spiking from N815 to N870 per litre in just one day, intensifying concerns about nationwide fuel affordability, even as Dangote prepares to initiate bulk distribution using a newly acquired fleet of 4,000 CNG-powered trucks from August 15.
Dangote Group officials, however, defended their approach, arguing that direct distribution aims to eliminate significant logistics expenses, ultimately saving the country over N1.7 trillion annually and benefiting millions of small businesses by lowering energy costs. “Removing logistics cost from the pricing model will lead to efficiency and enhance economic growth,” a Dangote official explained.
Other industry leaders, like Billy Gillis-Harry of PETROAN, echoed NOGASA’s worries, urging government regulators to step up market oversight and ensure fair competition. They pointed to risks of market monopolization and potential price-fixing, referencing the dire precedent seen in the cement industry, where consolidation led to runaway price hikes.
The Dangote Group maintains they are committed to open competition, noting that the capacity of 4,000 trucks is insufficient to meet the needs of all 774 local governments, refuting accusations of monopolistic tendencies.
Depot owners have further complicated the picture by hiking prices sharply and suspending some petroleum sales, echoing sector-wide uncertainty. As the Dangote refinery gears up for its next operational phase, the future of petroleum distribution in Nigeria hangs in the balance.
okay.ng reports the refiners’ distribution strategy and its sweeping implications continue to fuel passionate debate and high stakes for economic stability, job security, and national energy access.
