₦airaland Forum

Less than 30 days to the commencement of the highly anticipated rollout of 4,000 Compressed Natural Gas trucks by the Dangote Refinery and Petrochemical Limited, industry stakeholders have signalled an alignment with the refinery’s plan to begin direct fuel distribution to marketers and critical sectors of the economy from August 15, Sunday PUNCH reports.

Checks revealed that as of Friday, no fewer than 25 marketers had signed up with Dangote refinery for the direct fuel distribution deal.

The figure rose from an initial three, signalling increasing alignment between the indigenous refinery and oil marketers.

However, the development is fuelling concerns among tanker drivers, who fear massive job loss when Dangote begins direct supply of Premium Motor Spirit to the oil marketers.

The refinery had last month announced its intention to supply PMS and diesel directly to petroleum marketers, retail dealers, manufacturers, as well as major players in the telecommunications and aviation industries, a move seen as a major disruption to Nigeria’s traditional fuel supply chain.

25 strategic partners.

In what appears to be growing market confidence in the refinery’s logistics scheme, the number of strategic partners collaborating with Dangote for the fuel distribution initiative has now surged from three to 25, officials have confirmed.

A senior executive at Dangote Group, who spoke on Friday to Sunday PUNCH on condition of anonymity, said marketers are registering ahead of the August launch, with the refinery preparing to move products nationwide using its fleet of 4,000 trucks.

"Yes, more marketers are now registering with us ahead of the planned free distribution of petroleum products using 4,000 trucks. Right now, the number of strategic partners has grown to 25. We started with three partners but now, it has jumped to 25 partners,” the Dangote official said.

The refinery had said the move is part of an effort to fill the gap created by Nigeria’s dependence on imports and to ensure the availability of refined products across the country.

Stakeholders say the free distribution scheme may significantly impact pump prices and ease logistics challenges, especially in northern Nigeria.

However, the refinery’s growing influence in the downstream sector has sparked debates around market dominance, regulation, and the long-term impact on local competition.

Marketers left with no choice

Giving the latest market reaction to the development, the National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria, Chinedu Ukadike, admitted that marketers were left with little choice but to align with Dangote.

“Well, we don’t have any option. Dangote has become the only supplier of petroleum products in Nigeria and West Africa. I don’t know if they have conquered other markets but I am talking authoritatively on information at my desk as the IPMAN spokesperson.

"We don’t have any other alternative and we are ready to partner. Most of us are ready to collaborate with Dangote. Marketers have applied to benefit from the free distribution scheme,” Ukadike told Sunday PUNCH.

According to him, the decision is driven by economic realities, especially the high cost of fuel, which has crippled the profitability of retail operations.

"Let me also state that whatever would bring petroleum price low at the dispensing point is the fulcrum of IPMAN members. Once the price is lower, the product will move faster, and there will be a gainful return on investment, but anytime you find that the product is high, contrary is the case.

“Sometimes, we don’t even finish one truck of petroleum product in a month and the running cost is accumulating. It is stagnant and can’t be waived. You can’t say that because you were unable to finish one truck in a month, the salaries of your workers won’t be paid. Nobody listens to that,” he explained.

"Ukadike warned, however, that the current state of monopoly is unsustainable in the long term.

“We also charge other refineries to please come up, so that there can be competition, especially government-owned refineries. This will put a balance to the issue of monopoly.

“We simply don’t have any choice. But we won’t starve Nigerians. We are no longer importing, which means the refinery is supplying government too. So we just have to build more refineries to ensure the price comes down.”


Tanker drivers panic

But while many independent marketers are embracing the refinery’s free distribution offer, there is growing panic over possible job losses among tanker drivers.

Sunday PUNCH’s interactions with the leadership of tanker drivers on Saturday revealed increasing concern about their future as more petroleum marketers align with Dangote’s plan to distribute fuel directly to filling stations and bulk consumers.

There are fears that the new arrangement could phase out tanker drivers and render their trucks redundant.

However, some of these drivers may eventually be absorbed into the Dangote workforce, Sunday PUNCH learnt.

As the Dangote refinery currently supplies a significant share of the fuel in circulation, most drivers presently lift products from its gantries. But with the planned deployment of Dangote-owned trucks, many fear that thousands of independent drivers may soon be out of work.

Although other depot owners and marketers still operate their own trucks, it is believed that many may opt for the free delivery option to cut logistics costs.

“Some of the marketers may need to park their trucks to enjoy free delivery,” an analyst noted.

Speaking with our correspondent on Saturday, the National President of the National Association of Road Transport Owners, Yusuf Othman, confirmed that stakeholders were planning to meet over the matter to make their positions known.

He, however, declined to disclose how the scheme would affect his members, saying consultations were ongoing.

“I am not going to say anything about it because we are in discussion,” Othman said.

Asked whether the discussions were with Dangote, he replied, “The discussion is with the stakeholders generally.”

In a similar vein, suppliers of petroleum products have also expressed concerns that if Dangote begins to sell petrol, diesel, and aviation fuel directly to bulk consumers such as filling stations, telecom firms, and industries, they and their drivers could lose their livelihoods.

Consequently, the Natural Oil and Gas Suppliers Association of Nigeria has scheduled a National Executive Council meeting to discuss the implications of Dangote’s distribution plan.

According to a notice issued by the association’s Secretary-General, Tunde David, the meeting, scheduled to hold in Abuja on July 31, followed due consultations with NOGASA’s National President, Benneth Korie.

It partly read, “Following due consultations with the National President, Mr Benneth Korie, DOI; 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 urges caution

Meanwhile, the Petroleum Products Retail Outlets Owners Association of Nigeria has warned against what it described as a “Greek gift” by Dangote.

The National President of PETROAN, Billy-Gillis Harry, drew parallels with past monopolies in Nigeria’s flour, sugar, and cement industries, warning that such distribution schemes may only offer temporary relief before ushering in higher prices.

He said, “I think Nigerians need to be careful about accepting a ‘Greek gift’. We need to be much more insightful, as we have experienced it in different spheres of the economy, whether it is flour, sugar, or cement.

“The methods have never been any different. So if you go round the country, you would see containers of cement at selling points. But it did not at any time reduce the cost of cement.

"So there is no anticipation that when everybody is drummed out of the 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. It has happened in other areas. We are courageous enough to stand by our point.”

The 650,000-barrel-per-day refinery came on stream in January 2024, first rolling out diesel and aviation fuel A1.

PMS rollout followed nine months later, in September 2024.

As of February this year, the refinery disclosed that it had reached 85 per cent of its installed capacity, expressing confidence in the speedy attainment of full capacity.

ironheart:
Monopoly at play here, it happened in the cement industry, same tactic is being deployed.

I remember buying Dangote cement for 950 but now its 10 times the price

EarthKing:
One of the basic characteristics of a monopolistic market is price control. With all this strategic moves, PMS will definitely sell at 3k per liter in no distant time. Wait for it!

ironheart:
Monopoly at play here, it happened in the cement industry, same tactic is being deployed.

I remember buying Dangote cement for 950 but now its 10 times the price

dederocs:
How did you come about this mathematics?

Or you just open your mouth because you feel like talking....the competitors won't disappear...the lowest prices wins.

ncoolsome:
Monopoly is starring at us yet we can't see it until it's finally here

EarthKing:
.

It's based on assumptions, and from past events. This current set up won't give room for competitors.

That reminds me, how much is bag of cement again?