Dangote’s CNG Truck Rollout Divides Marketers as Free Delivery Plan Sparks Tension
- As the date for the nationwide rollout of Dangote Refinery’s 4,000 CNG trucks nears, marketers have expressed mixed feelings over the project
- The refinery’s plan to provide free distribution and credit facilities to end users has ignited fears of monopoly and job losses
- While IPMAN welcomed the move, other marketers and industry players call the move a Greek gift from the mega refinery
Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
With the imminent deployment of 4,000 Compressed Natural Gas (CNG) trucks by Dangote Petroleum Refinery, Nigeria’s downstream oil sector is abuzz with both anticipation and anxiety.
The company’s free distribution model promises to cut costs for marketers but has sparked concerns about monopoly and job losses among industry players.
Source: Getty Images
IPMAN calls it a necessary partnership move
The Independent Petroleum Marketers Association of Nigeria (IPMAN) admits its members feel they have no real alternative.
“Dangote is the only major supplier in Nigeria and West Africa now,” said IPMAN’s Publicity Secretary, Chinedu Ukadike.
He explained that free product delivery could reduce pump prices and help retailers survive in a tough market. However, Ukadike cautioned that over-reliance on one supplier could be dangerous, urging the government to revive other refineries.
PETROAN warns of hidden monopolistic agenda
Not all players are optimistic. The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) is urging the industry to approach Dangote’s offer with scepticism.
“We’ve seen this story before in cement, sugar, and flour. The prices never dropped,” said PETROAN President, Billy-Gillis Harry.
He fears that once competition is eliminated, pump prices could skyrocket to ₦2,500 per litre. PETROAN insists the industry must resist becoming overly dependent on a single supplier.
NARTO silent as stakeholder talks continue
The National Association of Road Transport Owners (NARTO), whose members are most vulnerable to the logistics shift, has remained largely silent.
NARTO President Yusuf Othman declined to comment, citing ongoing consultations.
Industry insiders suggest that some tanker drivers may be absorbed into the Dangote logistics chain. In contrast,e many others could face unemployment as private marketers park their trucks in favour of free deliveries.
Suppliers and drivers raise the alarm
Members of the Natural Oil and Gas Suppliers Association of Nigeria (NOGASA) are scheduled to meet on July 31 to decide how to respond.
Their main concern is that Dangote could bypass long-established supply networks by delivering fuel directly to industries, telecom firms, and large-scale users—effectively cutting out thousands of traditional fuel transporters.
A logistics consultant warned:
“We could see massive disruptions in the tanker driver ecosystem, with little opportunity for them to adapt.”
Dangote’s model promises efficiency, raises concerns
The Dangote Group argues that its vertically integrated model will ensure affordable and reliable access to fuel across Nigeria.
The 650,000 bpd refinery began full PMS production in September 2024 and now operates at 85% of capacity.
Source: Getty Images
The refinery also disclosed that Nigeria could save about N1.7 trillion annually from the free distribution initiative.
Company officials claim that the goal is not to dominate but to stabilise the market.
Future of distribution hangs in the balance
As more marketers sign agreements with Dangote, now reportedly numbering over 25, the future of Nigeria’s downstream fuel logistics appears increasingly tied to the company’s operations.
While some hail it as a needed revolution, others fear the long-term cost of allowing one player to control too much of the market.
Industry stakeholders are watching closely as the rollout begins on August 15.
Dangote refinery adds 15 new fuel distribution partners
Legit.ng earlier reported that Dangote Refinery has said that many oil marketing companies joined its growing list of fuel distribution networks.
The refinery disclosed in a statement on Tuesday that the companies include TotalEnergies, Garima Petroleum, Sunbeth Energies, Sobax Nigeria Limited, and Virgin Forest Energy.
Others are Sixxco Oil Ltd., NU Synergy, and Soroman Limited.
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Source: Legit.ng
