Oil stakeholders under the aegis of Natural Oil and Gas Suppliers Association of Nigeria (NOGASA) have called for the establishment of a joint distribution framework between the Dangote Refinery and existing downstream operators to avoid supply disruptions.
Speaking at NOGASA’s Annual General Meeting in Abuja on Thursday, its National President, Mr Benneth Korie, urged the refinery to work with industry associations rather than bypass them through direct supply to retailers.
Mr Korie argued that such collaboration would protect jobs, ensure market stability, and safeguard the nation’s fuel supply chain, proposing a model in which the refinery focuses strictly on refining and bulk sales to depot owners and marketers, while distribution to the over 50,000 filling stations nationwide remains in the hands of established operators.
“Refining and distribution are two different specialisations. The best approach is for Dangote to refine, sell to marketers, and let us handle distribution. This way, the refinery stays focused on production while marketers maintain nationwide supply,” Mr Korie said.
He warned that bypassing marketers through direct supply could lead to massive job losses in the downstream sector, disrupt existing community relationships in volatile areas, and create bottlenecks that may trigger scarcity.
Mr Korie recalled that NOGASA has strongly supported the Dangote Refinery project in its formative years, even lobbying the Federal Government for intervention to ensure its completion.
“No one has supported the Dangote Refinery more than NOGASA. But we have to be honest, direct distribution will create more problems than it solves. We are proposing a win-win arrangement where all stakeholders benefit,” he added.
The NOGASA president further urged the refinery management to convene an urgent stakeholders’ meeting involving the Independent Petroleum Marketers Association of Nigeria (IPMAN), Petroleum Tanker Drivers (PTD), National Union of Petroleum and Natural Gas Workers (NUPENG) and other industry players to agree on a sustainable distribution model.
Also speaking, the National President of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), Mr Billy Gillis-Harry, warned that Dangote’s plan to refine, store, transport, distribute and sell directly to the public amounts to a “forward integration strategy” that could crush competition and destabilise the downstream petroleum sector.
Mr Gillis-Harry likened the situation to the cement industry, where dominant producers now control both production and distribution, leading to steep price hikes from about N115 per bag years ago to over N10,000 today.
He alleged that Dangote was already selling fuel at below-cost prices to capture market share,a move he said could drive independent marketers out of business.
“When one company wants to refine, store, handle logistics, distribute and fix prices, it becomes both a businessman and a regulator. That is dangerous for competition and for the economy.
“This is not cement. This is PMS and AGO that run over 95 per cent of Nigeria’s energy needs. If one company controls it all, even the hairdresser will not work again,” he warned.
The PETROAN president urged the Federal Government to enforce clear role separation in the downstream petroleum sector as provided in the Petroleum Industry Act (PIA) and to ensure regulators have the capacity to monitor and prevent anti-competitive practices.
He also called for the reservation of at least one million barrels of crude oil daily for domestic refining, saying this would ensure local refineries, including smaller, regional ones, have adequate feedstock to operate efficiently.
Mr Gillis-Harry also suggested continuous stakeholder consultations involving the refinery, marketers, transporters, labour unions and regulators to design a distribution model that supports competition, prevents job losses and guarantees nationwide fuel availability.