The Dangote Petroleum Refinery has announced it will incur over N1.07 trillion annually to absorb the logistics costs of fuel distribution nationwide. The company also revealed it has committed over N720 billion to the deployment of 4,000 Compressed Natural Gas (CNG)-powered trucks, a strategic initiative aimed at ensuring direct delivery of petroleum products across the country.
The initiative, which is expected to begin on August 15, 2025, will enable the refinery to distribute petrol, diesel, and aviation fuel directly to filling stations, industrial consumers, and large-scale users without involving traditional fuel marketers. This decision is part of a broader logistics solution to reduce the pump price of fuel, curb inflation, and support Micro, Small and Medium Enterprises (MSMEs).
In a statement made available to newsmen, Dangote Refinery explained that its logistics model is aimed at eliminating middlemen, easing transportation bottlenecks, and enhancing fuel accessibility across Nigeria.
“This bold step will see the privately-owned refinery absorb over N1.07tn annually in fuel distribution costs,” the company stated. “The initiative is also poised to significantly benefit over 42 million MSMEs by reducing energy costs and enhancing profitability.”
The current average logistics cost of fuel in Nigeria stands at N45 per litre, meaning that for Nigeria’s estimated daily consumption of 65 million litres—which includes 45 million litres of petrol, 15 million litres of diesel, and 5 million litres of aviation fuel—the annual logistics burden hits the trillion-naira mark. Dangote Refinery has committed to bearing this cost fully as part of its free fuel distribution plan.
The initiative is not only expected to lower fuel prices and stimulate small business profitability, but also to resuscitate dormant filling stations across the country. It is projected to create over 15,000 direct jobs, including those for truck drivers, CNG station managers, and fuel attendants.
In addition to truck deployment, the company is building a nationwide network of CNG “mother and daughter” stations, reinforcing its commitment to clean and cost-effective fuel logistics. These infrastructure investments, the company emphasized, are aligned with its larger goal of enhancing energy efficiency, supporting environmental sustainability, and driving Nigeria’s economic development.
Industry experts believe this unprecedented step by Dangote could signal a major shift in how fuel is transported and priced in Nigeria.
Energy analyst Ayodele Fagbemi noted, “Dangote’s investment in CNG trucks and direct fuel delivery could drastically reduce the cost of refined products, especially in remote areas where high logistics costs often inflate pump prices. It will also cushion inflation and reduce dependence on road tankers powered by diesel.”
Furthermore, the refinery added that the logistics initiative would help curb cross-border smuggling of petroleum products by tracking deliveries and ensuring supply consistency within the country’s borders.
The move comes as the 650,000 barrels-per-day Dangote Refinery—Africa’s largest—ramps up operations with an eye on satisfying domestic demand and exporting refined products.
The refinery’s statement concluded that the initiative aligns with its long-term strategy to strengthen Nigeria’s energy self-sufficiency and industrial growth.
As fuel prices continue to exert pressure on households and businesses, stakeholders are hopeful that the Dangote distribution strategy could usher in a new era of efficiency and affordability in Nigeria’s petroleum downstream sector.