Suppliers Threaten to Halt Operations Over Dangote Refinery’s Direct Sales Plan
- Dangote Refinery plans to bypass traditional suppliers and distribute petroleum products directly to end-users, starting in August 2025.
- The Natural Oil & Gas Suppliers Association of Nigeria (NOGASA) warns that this move could lead to job losses and disrupt the industry
- NOGASA is set to hold a general meeting to discuss potential actions, including halting operations, and to lobby for a new distribution model
Legit.ng journalist Zainab Iwayemi has 5-year-experience covering the Economy, Technology, and Capital Market.
In the event that Dangote Refinery does not reverse its plan to distribute petroleum products directly to end consumers, circumventing the conventional distribution channel, the Natural Oil & Gas Suppliers Association of Nigeria (NOGASA) has warned that its members may halt their operations.
Source: Getty Images
Benneth Korie, president of NOGASA, expressed concerns that this action would seriously disrupt the oil and gas sector, endangering thousands of jobs and the current business models of suppliers across the country.
As a result, the association has decided to call a general meeting to discuss whether or not to cease operations, The Nation reported.
“We are holding a general meeting on the 31st to decide whether to down tools and to find a way to ensure that Dangote will supply the product to them, rather than supplying directly to the end-users. We will, in turn, supply to the end-users. These are chains of distribution,” Korie said.
Beginning on August 15, 2025, Dangote Refinery intends to supply petroleum products directly to end-users.
On June 15, 2025, the refinery announced that it would use 4,000 new tankers powered by compressed natural gas (CNG) to distribute Premium Motor Spirit (PMS) and diesel throughout the country, avoiding traditional depots and middlemen and going straight to marketers, gas dealers, manufacturers, telecom companies, aviation companies, and other major consumers.
However, Korie claims that Dangote's decision to sell directly to large businesses, including hotels and telecom behemoths, represents a significant shift in the industry.
NOGASA members, who act as middlemen between refineries and end-users, are concerned that their jobs may become obsolete as a result of this new distribution strategy.
“This is the new trend in the oil and gas industry, where Dangote is now supplying products directly to end-users, especially MTN, companies, hotels, and others. Members of NOGASA are suppliers of petroleum products. By doing so, many jobs are at stake, and we are opposing this new way of supplying products to end-users,” Korie stated.
Korie went into further detail about the potential repercussions, emphasising that numerous NOGASA members and their staff may lose their jobs. The omitted supply chain directly leads to the looming redundancy of trucks, drivers, and other logistics personnel.
This, according to the association, would have a ripple effect not only on the livelihoods of their members but also on the Nigerian economy.
“It will remove jobs from many of them, and some of our staff and trucks will become redundant,” Korie warned.
Source: Getty Images
According to him, the general meeting of NOGASA is set for July 31 at the Chida Hotels in Abuja. The agenda will centre on creating a cohesive approach to deal with the problem, which may involve downing tools and speaking with Dangote directly to find a solution.
The association is attempting to lobby for a distribution structure where Dangote supplies items to NOGASA members, who would subsequently sell to end-users, thus protecting jobs within the supply chain.
Avoiding the conventional distribution system is "not healthy for the oil and gas industry" and could jeopardise its stability, it emphasised.
Dangote introduces new incentive program
Legit.ng reported that Dangote Refinery has stated that its program of strategic partnerships with petroleum marketers will be restructured but will remain intact. The company said that it was creating a new reward or incentive program for devoted partners.
The guarantee follows the suspension of the Refinery's gasoline delivery program by the management, which discovered a massive product diversion operation using its affiliate marketers and strategic partners.
To prevent further market distortion, it advised all retail stations to adhere to the suggested pump prices.
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Source: Legit.ng
