The Dangote Petroleum Refinery’s plan to bypass traditional distribution channels and supply refined petroleum products directly to end-users has sparked a heated debate in the industry. The Natural Oil and Gas Suppliers Association of Nigeria (NOGASA) has warned that the move would lead to a nationwide disruption, long-term product scarcity, and the collapse of existing supply networks. NOGASA’s National President, Bennett Korie, urged the refinery to halt its plan and seek further dialogue before commencing the distribution of products to end-users. He also called on President Bola Tinubu to intervene in the matter, stressing that Dangote alone cannot handle nationwide distribution of products sustainably.
Korie expressed concerns that if existing retail outlets were forced out of business due to Dangote’s direct distribution approach, it would be difficult to revive the supply chain in the event of any disruption at the refinery. He cited the failed attempt by the Nigerian National Petroleum Company Limited (NNPCL) at direct distribution, which led to the decline of state-owned refineries. “We are pleading that Mr. President should intervene in this matter by telling Dangote to slow down and go by the rules of the game,” Korie said. The NOGASA president emphasized that the association fully supports the operations of the Dangote refinery but believes that handling refining, distribution, and retail through filling stations as a single entity is unsustainable.
The Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN) has also backed NOGASA’s stance, with its National President, Billy Gillis-Harry, warning that Nigerians should not rejoice yet over the announcement by the Dangote refinery. Gillis-Harry noted that the refinery’s plan would lead to a situation where one company would be both a businessman and a regulator, which could spell doom for the industry. He cited the example of the cement industry, where Dangote’s dominance has led to high prices and market control. “We don’t need to pretend that we don’t know what’s going to happen,” Gillis-Harry said.
In response, a senior official of the Dangote Group described NOGASA’s position as “anti-Nigeria,” arguing that the plan was aimed at removing the cost of logistics in the movement of petrol nationwide. The official questioned why NOGASA members would want to disrupt fuel supply when someone wants to distribute fuel “for free” without the cost of logistics. “Why are they angry? Why the disruption, if not anti-Nigeria?” the official asked. The Dangote Group has invested N720 billion in its fuel distribution initiative, which is expected to save Nigerians over N1.7 trillion annually and lift 42 million Micro, Small, and Medium Enterprises.
Meanwhile, depot prices for petrol have spiked by up to seven percent, from N815 per litre to N870 per litre, amid the uncertainty surrounding the Dangote refinery’s plan. The price hike has raised concerns about the potential impact on pump prices nationwide. As the debate continues, it remains to be seen how the government will respond to the concerns of NOGASA and PETROAN, and whether the Dangote refinery’s plan will ultimately benefit or harm the Nigerian economy.
