Tensions are rising in Nigeria’s petroleum industry following Dangote Refinery’s announcement to begin direct nationwide distribution of fuel.
Several marketers have warned that the move could disrupt the established supply chain.
Dangote refinery had disclosed plans to distribute Premium Motor Spirit (PMS) and diesel across the country to fuel marketers, petrol dealers, manufacturers, and major industries including telecommunications and aviation.
In a statement issued on Sunday, the company described the initiative as a major transformation in Nigeria’s fuel distribution network.
The rollout is set to commence on August 15, 2025, and will be supported by a fleet of 4,000 brand-new Compressed Natural Gas (CNG)-powered tankers.
The announcement has divided opinion among marketers. While some see potential benefits, others have raised concerns over possible monopolistic practices and adverse effects on competition and energy security.
Sources revealed that members of the Major Energy Marketers Association of Nigeria (MEMAN) and other associations are preparing for high-level meetings this week to discuss the broader market implications of Dangote’s plan.
The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has strongly opposed the move, describing it as a veiled attempt at market domination.
“The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has raised concerns about Dangote Refinery’s forward integration adoption, warning that it could lead to a monopoly in disguise and pose a significant job loss threat to Nigeria,” said Joseph Obele, PETROAN’s national public relations officer.
“With a production capacity of 650,000 barrels per day, PETROAN argues that Dangote Refinery should be competing with global refineries, not operating as a distributor in the downstream sector. This massive refinery, one of the largest in sub-Saharan Africa, is expected to satisfy domestic fuel demand and export surplus products.”
According to the association, Dangote may be pursuing a pricing penetration strategy—lowering prices to gain market share and drive out competitors.
“This could lead to a massive shutdown of filling stations across Nigeria, resulting in widespread job losses,” the statement continued, adding that the introduction of 4,000 CNG tankers poses a serious threat to the livelihoods of current truck drivers and tanker owners.
PETROAN warned that Dangote’s dominance could edge out modular refineries, local suppliers, and telecom diesel vendors, further entrenching a monopoly and reducing consumer choice.
The Independent Petroleum Marketers Association of Nigeria (IPMAN) took a more measured approach, describing Dangote’s move as a natural consequence of deregulation.
National Publicity Secretary, Chinedu Ukadike, told Daily Trust that while the strategy could improve fuel availability, it would be safer and more efficient to reactivate national pipeline infrastructure.
“We have other better ways of pushing petroleum products. With his new-found cooperation with the federal government, we believe he (Dangote) could have used his expertise to fix the pipelines and ensure that his products pass through the pipelines,” he said.
He also warned about the dangers of putting 4,000 trucks on deteriorating Nigerian roads, which could worsen the country’s already high road accident rate.
An independent marketer, speaking anonymously, likened Dangote’s plan to how Elon Musk disrupted the auto industry in the U.S.
“Anyone in fuel distribution or haulage will feel threatened. Depot owners without retail outlets might find this especially devastating,” he said.
He cautioned against centralizing control of the fuel supply, warning that Nigeria could face serious risks if one player dominates the downstream sector.
“Once other players are driven out and he controls the market, any future conflict or price hike could hurt everyone. The country needs to avoid putting all its eggs in one basket,” he added.
While the Dangote Refinery’s direct distribution model is being hailed by some as a potential game-changer, it is also viewed with suspicion by many in the industry who fear job losses, market imbalance, and the risk of a private monopoly emerging in a vital national sector.
-Additional report by Daily Trust