Leading oil marketers have raised alarm over the Dangote Petroleum Refinery‘s plan to bypass traditional distribution channels by supplying refined products directly to large consumers nationwide. The move, they warn, could trigger widespread disruption, threaten existing supply networks, and displace thousands of workers across the petroleum value chain.
The Natural Oil and Gas Suppliers Association of Nigeria (NOGASA) and the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN) voiced strong opposition, urging the Federal Government to intervene. They cited risks of market instability, long-term scarcity, and economic displacement as key concerns.
Bennett Korie, National President of NOGASA, speaking during the association’s Annual General Meeting in Abuja, called on President Bola Tinubu to mediate the issue and ensure that Dangote Group does not monopolize refining and distribution. According to Korie, the $20bn Dangote Refinery should focus on refining and allow traditional marketers to handle distribution, as was the practice before similar centralization attempts undermined the Nigerian National Petroleum Company Limited (NNPCL).
“Nobody is against Dangote Refinery. In fact, we were among its strongest supporters. But trying to handle refining, distribution, and retail singlehandedly is unsustainable,” Korie said. He emphasized that history showed how NNPCL’s expansion into retail weakened its core refining operations.
Industry apprehension deepened after the refinery announced plans to deploy 4,000 Compressed Natural Gas (CNG)-powered tankers to supply petrol and diesel directly to manufacturers, telecoms, and aviation firms starting August 15. With an investment of over N720bn, the initiative aims to eliminate logistics costs and save Nigeria an estimated N1.7tn annually.
Yet, stakeholders argue that such centralization could replicate failures from the past and harm over 50,000 filling stations nationwide. PETROAN President Billy Gillis-Harry likened the scenario to what happened in Nigeria’s cement sector, where overconcentration led to price surges from N115 to over N10,000 per bag.
Gillis-Harry warned that retail outlets currently suffer losses of up to N80 per litre and that further concentration of distribution power would lead to job losses and pricing manipulation. He called on the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and the Petroleum Ministry to implement pricing oversight and protect stakeholders.
“The Dangote Refinery should not become the refiner, transporter, retailer, and price-setter all in one. That would distort the market and hurt small businesses,” he said.
Despite the backlash, a senior Dangote Group official defended the plan, stating that it was designed to remove unnecessary cost layers and make fuel more affordable. He dismissed allegations of monopolistic intent, arguing that 4,000 trucks were insufficient to serve all 774 local government areas.
“We are reducing the cost of logistics. We are not asking for money. Why would anyone oppose cheaper fuel distribution? The market is big enough for everyone to thrive,” the official said anonymously.
Meanwhile, petrol prices at private depots surged from N815 to N870 per litre following Dangote’s temporary suspension of sales. The refinery, in an internal memo, halted further payments for PMS loading pending an update, intensifying speculation about market direction.
Depot operators such as NIPCO, Aiteo, and Sahara have all raised their prices, suggesting a possible rise in pump prices nationwide in the coming days.