The Dangote Oil Refinery, Africa’s largest with a refining capacity of 650,000 barrels per day, will begin selling fuel directly to end users in August. The move marks a dramatic shift in Nigeria’s fuel supply chain, as the refinery sets its sights on direct distribution to filling stations, manufacturers, telecommunications firms, and other large-scale consumers—entities that have historically relied on independent fuel marketers.
Since commencing production of gasoline for the domestic market last year, the refinery has allowed local distributors to lift its products. However, this new direction signals the company’s intention to take charge of the entire supply chain, from refining to retail delivery.
In a statement released on Sunday, the refinery outlined the scale of its forthcoming distribution strategy. It has procured 4,000 Compressed Natural Gas (CNG)-powered trucks—more than twice the number of trucks currently operating in Nigeria’s fuel logistics sector. Additionally, it plans to roll out over 100 CNG refueling stations across the country to support the shift towards cleaner energy transport options.
As part of its commercial offering, the refinery will provide a credit facility allowing bulk buyers of 500,000 liters to access an additional 500,000 liters on credit for two weeks, provided they present a valid bank guarantee. This arrangement could give large customers increased flexibility while reducing upfront capital pressure, further incentivizing them to move away from traditional fuel suppliers.
However, this ambitious entry into direct sales has drawn sharp criticism from existing stakeholders in the fuel distribution network. Billy Gillis Harry, president of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), expressed concern over the potential fallout. Representing a network of more than 6,700 members, Harry warned that Dangote’s massive deployment of CNG trucks and direct sales strategy threatens the survival of local traders and independent transporters.
“In one fell swoop, he’s trying to wipe us out,” Harry said, arguing that the introduction of cost-effective CNG trucks would drastically undercut existing fuel distribution businesses that currently serve telecom towers, manufacturing plants, and service stations.
The development presents both opportunities and challenges. While the initiative could stabilize fuel availability and lower transportation costs due to the adoption of CNG-powered logistics, it may also lead to significant displacement within the sector, especially for small and mid-sized operators.
Industry observers will be closely watching how the rollout unfolds in the coming months and whether the government intervenes to protect smaller players or adjusts regulatory frameworks in response to this seismic shift in Nigeria’s fuel economy.