Marketers disagree with Dangote’s fuel distribution plan, fear business shutdown
National President, Petroleum Products Retail Outlets Owners Association of Nigeria, Billy Gillis-Harry
Marketers disagree with Dangote’s fuel distribution plan, fear business shutdown
* … says competition should always be allowed to protect consumers and promote economic efficiency.
* Refinery gives assurance offering credit facility to those purchasing a minimum of 500,000 litres.
* Pump price reduction could be experienced with improved efficiency.
Oil marketers under the aegis of the Petroleum Products Retail Outlets Owners Association of Nigeria have raised concerns over the Dangote Petroleum Refinery’s plan to distribute fuel directly to filling stations and other businesses nationwide.
PETROAN warned that the policy could lead to job losses and place Dangote in a monopoly-like position. With a production capacity of 650,000 barrels per day, PETROAN argued that the 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,” the oil dealers said in a statement signed by PETROAN’s Publicity Secretary, Joseph Obele, on Monday.
PETROAN said it had previously raised the alarm about Dangote’s intentions to dominate the downstream sector, citing concerns that “the company may leverage its market power to fix prices, limit competition, and exploit consumers, much like it has done in other sectors.”
The association warned that Dangote’s tactics might include a pricing penetration strategy, where it would reduce prices to capture market share, with the ultimate goal of forcing other filling station operators to quit the market.
“This could lead to a massive shutdown of filling stations across Nigeria, resulting in widespread job losses. The introduction of 4,000 brand-new Compressed Natural Gas-powered tankers by the Dangote refinery poses a significant threat to the livelihoods of thousands of truck drivers and owners. While CNG trucks may offer a lower cost of transporting petroleum products, this shift could lead to widespread job losses in the industry,” the statement added.
The association stated that adopting what it called a forward integration strategy by the Dangote refinery would greatly affect various stakeholders, including modular refineries, whose operations and market share, it noted, might be threatened by “Dangote’s dominance.”
As for truck owners, it stressed that job losses and reduced business opportunities could occur due to Dangote’s direct supply and the use of CNG-powered tankers.
PETROAN maintained that many filling stations could be forced to shut down while local suppliers of petroleum products might be negatively impacted by the refinery’s direct supply to end-users. The retailers projected that Dangote’s dominance could also threaten telecom companies’ diesel suppliers’ operations and market share.
“It is obvious that Dangote plans to gain full monopoly of the downstream sector, which would enable the company to exploit Nigeria’s petroleum consumers. This could lead to higher prices, reduced competition, and decreased economic efficiency.
“The National President of PETROAN, Dr Billy Gillis-Harry, calls on the Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority and the Minister of State for Petroleum Resources to put in place price control mechanisms to prevent any form of monopoly,” the statement read further.
Gillis-Harry emphasised that competition should always be encouraged to protect consumers and promote economic efficiency. He stressed that Dangote refinery’s dominance could stifle competition and its operations could negatively impact employment opportunities while promoting “anticompetitive” behaviours.
The PETROAN boss called for a competitive refining market environment, strong regulatory agencies to monitor market behaviour, adequate crude oil supply to local refineries, and alternative livelihoods for affected workers.
This came as findings showed that about 2,100 petrol retail outlet owners, 70 tank farm operators, and 95 jetty managers across the country might be pushed out of business as Dangote Petroleum Refinery moves to take full control of fuel distribution in Nigeria.
Owing to years of dependence on imported petrol, marketers had invested heavily in infrastructure such as tank farms, jetties, and logistics systems to facilitate fuel importation. However, with the new Dangote-led supply process, many of these costly investments risk being rendered obsolete, as the entire distribution chain would now be bypassed.
The marketers had recently raised the alarm that thousands of independent operators are scaling down their activities, citing mounting financial losses triggered by the volatile and unpredictable pricing of Premium Motor Spirit by the Refinery and fuel importers.
The situation forced over 4,900 petrol retail outlet owners from 7,000 outlets before the deregulation of the sector in 2023. Similarly, 70 tank farm owners have been compelled to cease operations in the past two years, leaving their facilities abandoned and idle as retailers and station owners increasingly avoid utilising their services.
The number of retailers dropped from 120 to 50 in two years. Also, a total of 95 jetty operators across the country are now facing an uncertain future.
However, contrary to PETROAN’s fears, the Dangote refinery said the scheme would lower fuel prices at the point of sale while improving fuel accessibility for both urban and rural communities.
The firm emphasised that the new initiative would support local economies and businesses, increase government revenue and strengthen long-term energy security and national efficiency. It was learnt that owners of filling stations can now make direct purchases and get free delivery without the involvement of third parties.
In an interview with The PUNCH, a petroleum expert, Prof Wumi Iledare, described the move as a classic case of vertical integration and not a monopoly. According to Iledare, though the refinery’s direct fuel distribution could disrupt traditional channels, it could also improve efficiency and reduce pump prices.
The energy expert charged stakeholders in the downstream to welcome competition instead of fear. “Dangote’s move to supply fuel directly to filling stations is a classic case of vertical integration, not monopoly.
“While it may disrupt traditional distribution channels, it can also improve efficiency, reduce pump prices, and enhance product availability. The real issue is not Dangote’s scale, but whether the regulatory environment ensures a level playing field for all players. We should welcome competition, not fear it—so long as it is fair and transparent,” Iledare said on Monday.
On Sunday, the Dangote refinery announced plans to begin nationwide distribution of Premium Motor Spirit and diesel from August 15, 2025.
“Dangote Petroleum Refinery is pleased to announce the commencement of a significant national initiative designed to transform Nigeria’s fuel distribution landscape. Effective August 15, 2025, the refinery will begin the distribution of Premium Motor Spirit and diesel to marketers, petrol dealers, manufacturers, telecoms firms, aviation, and other large users across the country, with free logistics to boost the distribution network.
“This strategic programme is part of our broader commitment to eliminating logistics costs, enhancing energy efficiency, promoting sustainability and supporting Nigeria’s economic development,” the company said.
The Major Energies Marketers Association of Nigeria told our correspondent that it was still studying the new initiative by the Dangote refinery, promising to make known its position later.
Reacting to the development, the Chief Executive Officer of PetroleumPrice.ng, Olatide Jeremiah, described it as “a revolutionary shift” for the downstream oil and gas industry.
“This is one of the biggest transformations in the history of the downstream sector,” he said in a telephone interview with The PUNCH on Monday. “I commend this initiative by Dangote Refinery because it will reduce abnormal middleman costs and ultimately lower fuel prices for end users. The old era of manipulative pricing is gone,” he added.
However, the National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria, Chinedu Ukadike, described the scheme as a welcome development. He said the initiative would create more jobs and make petroleum products more affordable.
“It is a welcome development. We, the independent marketers, are in support of anything that will give Nigerians energy security. As it is, wherever our trucks cannot reach, Dangote trucks will get there. That is a good thing. The more the supply, the cheaper the price,” he said.
Ukadike disagreed with claims that the direct sale of petrol by Dangote would lead to job losses. “I don’t agree that it will lead to job losses. Instead, it will create more jobs as more drivers would be employed by the refinery,” he stated.
Meanwhile, the refinery added that the first phase of the programme would continue over an extended timeframe. The refinery also said it would invest in CNG daughter booster stations, supported by a fleet of over 100 CNG tankers across the country to ensure seamless product distribution.
“This strategic programme is part of our broader commitment to eliminating logistics costs, enhancing energy efficiency, promoting sustainability, and supporting Nigeria’s economic development. It affirms our dedication to improving the availability and affordability of fuel, in support of broader efforts to strengthen the economy and improve the well-being of all Nigerians.
“Under this initiative, all petrol stations purchasing PMS and diesel from the Dangote Petroleum Refinery will benefit from this enhanced logistics support. Key sectors such as manufacturing, telecommunications, and others will also gain from this transformative initiative, as reduced fuel costs will contribute to lower production costs, reduced inflation, and foster economic growth. Players in these key sectors and others can purchase directly from the Dangote Petroleum Refinery,” the company explained on Sunday.
In addition, the refinery promised to offer a credit facility to those purchasing a minimum of 500,000 litres, allowing them to obtain an additional 500,000 litres on credit for two weeks under a bank guarantee.
“This pioneering effort marks a major milestone in our vision to revolutionise Nigeria’s energy sector. The Dangote refinery is dedicated to ensuring that no place is left behind. Our goal is to provide equitable access to affordable fuel for all Nigerians, regardless of location, making energy more accessible and sustainable for everyone, wherever they may be.
“It is expected to revitalise previously inactive petrol stations, thereby driving job creation, stimulating small and medium-sized enterprises, increasing government revenue, improving fuel access in rural and underserved communities, and strengthening investor confidence in Nigeria’s downstream petroleum sector,” it was added.
The Dangote Group stated that the initiative was in line with the Renewed Hope Agenda of President Bola Tinubu, reflecting its shared commitment to economic progress, stability, and inclusive development.
“We sincerely thank the Federal Government for its continued support, especially through the naira-for-crude scheme, which has helped stabilise fuel supply amid global price volatility. It marks a major revolution in the midstream and downstream sectors and stands as a key example of President Bola Tinubu’s bold and reformative economic policies.
“We invite marketers, petrol dealers, manufacturers, telecom companies, and all key stakeholders to embrace this landmark initiative. The registration process, including Know Your Customer verification, will take place from 16 June to 15 August, spanning a total of 60 days,” the statement disclosed.
