Petrol Dealers Reject Dangote’s Fuel Supply Plan, Warn of Mass Shutdown and Job Losses

Story written okafor joseph (July 19, 2025)

Oil Marketers Raise Alarm Over Dangote Refinery’s Direct Fuel Distribution Plan, Warn of Industry Collapse

A major crisis is brewing in Nigeria’s downstream oil sector as members of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) have raised serious concerns over the Dangote Petroleum Refinery’s plan to distribute fuel directly to filling stations and businesses across the country.

The marketers warned that the move could trigger widespread job losses, business closures, and an emerging monopoly in the fuel distribution chain. With a massive daily production capacity of 650,000 barrels, the Dangote refinery is now set to bypass traditional distributors and supply fuel directly to retailers—sparking panic across the industry.

PETROAN Fears Monopoly, Job Cuts, and Market Collapse

In a statement issued on Monday, PETROAN, through its Publicity Secretary Joseph Obele, cautioned that the plan would disrupt the downstream oil ecosystem. The group accused Dangote of deploying penetration pricing strategies to undercut competitors and dominate the fuel supply chain.

“This could force thousands of petrol stations out of business, especially smaller operators who can’t compete. The introduction of 4,000 Compressed Natural Gas (CNG) tankers by Dangote also threatens the jobs of truck drivers and independent logistics operators,” the statement said.

The association added that modular refineries, tank farms, jetties, and fuel importers stand to lose relevance if Dangote succeeds in its vertical integration model. Already, over 4,900 petrol stations have shut down since the 2023 deregulation, with PETROAN projecting more closures ahead.

Over 2,000 Retailers and 70 Tank Farms at Risk

Data from the association shows that more than 2,100 petrol retail outlet owners, 70 tank farm operators, and 95 jetty managers may soon be out of business due to Dangote’s direct-to-retail distribution model. Years of investment in fuel import logistics may be rendered obsolete.

PETROAN’s National President, Dr. Billy Gillis-Harry, urged the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and the Minister of State for Petroleum Resources to enforce price control and ensure fair competition in the industry.

“This level of market dominance can lead to exploitative pricing, reduced competition, and lower economic efficiency. Strong regulation is needed to prevent a monopoly,” Gillis-Harry said.

Dangote Defends Strategy, Promises Lower Fuel Prices and Wider Access

In contrast, Dangote Petroleum Refinery has defended the move, describing it as a strategic initiative aimed at reducing fuel costs, increasing nationwide access, and eliminating logistics bottlenecks.

In a statement issued Sunday, the refinery announced that nationwide fuel distribution would begin on August 15, 2025, with free delivery to filling stations, telecom companies, manufacturers, aviation firms, and other bulk users.

“This initiative eliminates third-party logistics costs, improves energy access in rural and urban areas, and enhances Nigeria’s economic efficiency,” the company stated.

Industry Experts and Marketers React

Petroleum industry expert, Prof. Wumi Iledare, described Dangote’s move as vertical integration, not monopoly. He urged stakeholders to embrace competition, noting the potential for cheaper fuel prices and greater efficiency.

“It’s not monopoly—it’s vertical integration. While traditional channels may be disrupted, fuel prices could drop, and access could improve. The key is ensuring a fair regulatory environment,” he said.

Independent Petroleum Marketers Association of Nigeria (IPMAN) also threw its weight behind the plan. Its Publicity Secretary, Chinedu Ukadike, called the initiative “a welcome development” that will expand job opportunities, not reduce them.

“With Dangote’s logistics network reaching inaccessible areas, fuel availability will increase, and prices will drop. This will support energy security and economic growth,” Ukadike added.

Dangote Refinery to Launch CNG Distribution Network

In the first phase of the plan, Dangote will roll out over 100 CNG tankers and invest in daughter booster stations across Nigeria. The company said this effort aligns with national goals of reducing transportation costs, lowering inflation, and improving economic productivity.

“This programme supports our commitment to reducing logistics costs, enhancing sustainability, and making fuel more affordable for Nigerians. Key sectors such as telecom, manufacturing, and aviation will benefit directly from the refinery’s supply,” Dangote stated.

Conclusion: A Tipping Point for Nigeria’s Downstream Sector

As the August rollout date approaches, Nigeria’s petroleum industry is bracing for a major shake-up. While Dangote’s direct fuel distribution promises cost savings and efficiency, thousands of marketers fear shutdowns, reduced market share, and unfair competition.

Regulatory agencies now face growing pressure to intervene, maintain a level playing field, and protect jobs and investments in the downstream oil sector.

Published by SpringnewsNG Media Limited
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