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PETROAN warns Dangote’s direct distribution plan could cripple 2,100 fuel outlets
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Oil marketers allege monopoly, massive job losses, and downstream collapse
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Dangote insists on lower prices, better access, and national economic reform
A fresh showdown is brewing in Nigeria’s petroleum sector as the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has sounded alarm over Dangote Petroleum Refinery’s plan to bypass traditional supply routes and distribute fuel directly to petrol stations and major consumers nationwide.
The association warned that the new initiative, set to begin on August 15, 2025, could result in the shutdown of over 2,100 filling stations, job losses across the logistics chain, and a complete takeover of the downstream sector by the Dangote Group.
In a statement signed by Mr Joseph Obele, PETROAN’s Publicity Secretary, the oil marketers described the plan as a threat to free market competition, alleging that Dangote was pursuing a pricing penetration strategy to corner market share and push out smaller operators.
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“This massive refinery is expected to satisfy domestic fuel demand and export surplus products. But with this direct distribution model, the company may exploit its market power to fix prices, limit competition, and exploit consumers,” the statement reads partly.
The marketers claimed that Dangote’s introduction of over 4,000 CNG-powered trucks would displace traditional truckers and logistics operators, threatening thousands of jobs.
“The shift may offer reduced transport costs, but will also result in widespread job losses across the sector,” PETROAN warned.
According to Dr Billy Gillis-Harry, PETROAN President, the company’s vertical integration threatens tank farms, modular refineries, and existing retail infrastructure.
He urged the Nigerian Midstream and Downstream Petroleum Regulatory Authority and the Minister of State for Petroleum Resources to intervene and establish fair competition guidelines. “We must prevent any form of monopoly. Price control mechanisms must be activated immediately,” he stated.
The association also revealed that deregulation had already forced over 4,900 outlets to shut down, with 70 tank farms and 95 jetties rendered idle in just two years. Many investors who spent heavily on infrastructure for petrol importation now face obsolescence due to the Dangote-led bypassing of the old distribution chain.
However, the Dangote Group defended its decision, stating the initiative would lower pump prices, eliminate middlemen costs, and boost rural fuel access. The company said free delivery, job creation, and credit facilities for bulk buyers were all part of the plan, aimed at revitalising the energy market and supporting President Bola Tinubu’s Renewed Hope Agenda.
“This is a strategic effort to eliminate logistics costs, enhance energy efficiency, and support national development,” the company explained, adding that petrol dealers, manufacturers, and telecom firms can now buy directly from the refinery with optional credit terms.
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Industry experts remain divided. Prof Wumi Iledare, a petroleum economist, described the move as “vertical integration, not monopoly,” suggesting it could cut pump prices and increase supply chain efficiency.
But others, like PETROAN, fear a devastating ripple effect on employment, investment, and competitive fairness.
Independent Petroleum Marketers Association of Nigeria’s Publicity Secretary, Mr Chinedu Ukadike, supported Dangote’s move, saying it would “create more jobs” and “bring fuel to places smaller marketers can’t reach.”
The refinery also announced plans to roll out daughter CNG booster stations and credit schemes for dealers buying 500,000 litres or more, signalling a bold step to reshape Nigeria’s energy market.
