The Dangote Petroleum Refinery's plan to supply refined petroleum products directly to end-users, bypassing traditional distribution channels, has sparked significant concern among Nigerian oil marketers. Industry stakeholders warn that this move could lead to widespread disruption in the nation's oil sector, including long-term product scarcity and the collapse of existing supply networks.
The Natural Oil & Gas Suppliers Association of Nigeria (NOGASA) and the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) have voiced strong objections to the refinery's strategy. They argue that the direct-to-consumer approach threatens the livelihoods of thousands of workers and could render many businesses obsolete. Benneth Korie, President of NOGASA, emphasized that bypassing traditional intermediaries jeopardizes the roles of suppliers who have long served as the link between refineries and consumers.
Dangote Refinery announced plans to deploy 4,000 new Compressed Natural Gas (CNG)-powered tankers to distribute Premium Motor Spirit (PMS) and diesel directly to various large-scale consumers, including manufacturers, telecom firms, aviation companies, and petrol dealers. This initiative, set to commence on August 15, 2025, aims to enhance efficiency and reduce costs in fuel distribution.
However, PETROAN warns that such a move could lead to a monopolistic market structure, where Dangote's dominance might force smaller operators out of business. The association's president, Billy-Gillis Harry, cautioned that this could result in the shutdown of over 2,100 filling stations nationwide, leading to massive job losses and reduced competition in the downstream sector.
Local marketers have already begun to boycott Dangote Refinery's products, purchasing only about 3% of its output. They allege that the refinery's pricing strategies are designed to undercut competitors, potentially leading to a market monopoly.
While Dangote Industries maintains that its approach will benefit consumers through lower prices and improved access, industry stakeholders urge the government to intervene. They call for regulatory measures to ensure fair competition and protect existing businesses from potential collapse.
As the debate continues, the Nigerian oil sector stands at a crossroads, balancing the promise of improved efficiency against the risks of market disruption and job losses.
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