Our Correspondent
The simmering dispute over Dangote Petroleum Refinery’s planned direct fuel distribution appears to have eased after the company assured petroleum marketers and tanker drivers that it would not bypass existing supply chains.
Recall the refinery, which begins its distribution scheme on Friday, August 15, had procured part of the 4,000 compressed natural gas (CNG)-powered trucks earmarked for nationwide delivery. The move initially triggered alarm among members of the Natural Oil and Gas Suppliers Association of Nigeria (NOGASA) and the National Association of Road Transport Owners (NARTO), who feared they might be rendered redundant.
Marketers Sound the Alarm
NOGASA warned that bypassing established distributors to supply directly to end users—such as telecom companies, hotels and large industrial consumers—could trigger nationwide disruption, lead to long-term product scarcity, and dismantle existing supply networks. The association called for urgent talks with the refinery and urged President Bola Tinubu to intervene, warning that no single entity could sustainably handle nationwide distribution alone.
NOGASA President, Bennett Korie, likened the risk to the failures of non-functional refineries under the Nigerian National Petroleum Company Limited, emphasising that investment in the supply chain must be protected.
Dangote Steps Back from Direct Sales
Following meetings between Dangote officials and industry representatives, NOGASA’s National Publicity Secretary, Chinedu Ukadike, confirmed a breakthrough: the refinery will sell to bulk buyers—primarily NOGASA members—rather than directly to end users.
“I want to say that Dangote heeded our plea,” Ukadike told The PUNCH. “They will send products to bulk buyers, who will then supply to end users. This protects our role as suppliers and safeguards our return on investment.”
He added that the initial panic stemmed from the belief that the refinery would retail fuel directly. “Now, members are registering on the Dangote portal as bulk buyers. Once payment is made, the trucks will deliver to us—not to the end users,” he said.
Tanker Drivers Still in Talks
NARTO President, Yusuf Othman, confirmed that consultations with Dangote are ongoing. “We met Dangote before, and we will meet him again,” he said, declining to comment on the specifics of their discussions.
Dangote’s Rationale
In a statement, Vice President of Oil and Gas at Dangote Industries Limited, Devakumar Edwin, said the deployment of 4,000 CNG-powered trucks was designed to reduce logistics costs—a major factor in the final pump price—and ensure consumers benefit from domestic refining.
He insisted the scheme was not aimed at displacing existing players. “The aim is to support logistics and make distribution more efficient,” Edwin said, adding that CNG-powered trucks would also cut emissions and improve environmental sustainability.
Industry Outlook
Dangote Refinery’s decision to align with bulk distributors reflects an acute awareness of the political and economic sensitivities in Nigeria’s petroleum sector.
Economic Impact: By cutting logistics costs with CNG trucks, the refinery could reduce pump prices, but this saving depends on global crude prices and the naira’s stability.
Political Considerations: Preserving existing distribution channels prevents a potential backlash from a politically influential network of marketers and transporters whose operations sustain millions of jobs.
Logistical Modernisation: Introducing CNG-powered trucks marks a gradual shift towards cleaner energy in transport, but integrating this into Nigeria’s ageing fuel infrastructure will be a long-term challenge.
Competitive Landscape: If Dangote’s model proves efficient and cost-effective, other players in the downstream sector may be forced to adopt similar logistics innovations to remain competitive.
Ultimately, the truce offers breathing space for both the refinery and traditional marketers. However, the durability of this arrangement will hinge on Dangote’s ability to maintain efficiency gains without eroding the role—and the profits—of entrenched distribution networks.