The Dangote Refinery and Petrochemicals will launch its Compressed Natural Gas (CNG) trucks for the commencement of nationwide distribution of Premium Motor Spirit (PMS) today (Monday, September 15), despite recent opposition from stakeholders in the downstream petroleum sector.
The refinery announced in August that it had received the first batch of its 4,000 CNG-powered trucks for the fuel distribution programme, which was initially set to commence on August 15. However, it couldn’t roll out due to supply issues.
The refinery invested about N720 billion on the CNG trucks to significantly lower logistics costs, reduce the environmental impact of fuel distribution, and benefit over 42 million micro, small, and medium enterprises (MSMEs) by lowering energy costs.
The trucks use CNG supplied by local partner Tetracore Energy Group and are designed to transport refined products directly from the refinery.
Speaking on Sunday, the owner of the facility, Mr Aliko Dangote, reiterated that his decision to adopt direct fuel distribution was to reduce dependency on third-party carriers for fuel distribution in Nigeria.
He said the move was not only a matter of strategic choice but a national imperative, during a courtesy visit by the AfricaRice Centre at his Lagos office on Sunday.
The development comes after the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) accused the refinery of “offering lower prices to international buyers while quoting higher rates to local off-takers.”
They alleged that the refinery does not offer free product delivery to buyers, adding that constant price slashes by the refinery, and to bypass them in distribution, were not patriotic, but a business move intended to monopolise the downstream market.
However, Mr Dangote said it decided to jettison the Single Point Mooring (SPM) system for fuel distribution to avoid an extra cost of N75 per litre in handling charges, which would translate to N1.5 trillion annually.
“If the Dangote Refinery were to load 40 million litres of PMS and 15 million litres of AGO (diesel) via the Single Point Mooring (SPM) at an extra cost of N75 per litre in handling charges, it would amount to approximately N1.5 trillion annually in avoidable charges.
“By contrast, utilising gantry loading and direct trucking would eliminate these costs entirely, resulting in substantial savings that could be redirected towards critical infrastructure investments.
“Losing N75 per litre to intermediaries who cannot guarantee that the products will be delivered to the Nigerian consumer is not a viable option. Rather than enabling such exploitation, we are committed to partnering with credible distributors and expanding humanitarian outreach, ensuring that petroleum products get to the Nigerian people transparently and affordably,” the company said in a statement.