Independent fuel marketers across Nigeria are raising alarm over the fuel distribution model being implemented by the Dangote Petroleum Refinery, warning that the current approach could drive many of them out of business.
The marketers, under various industry unions and associations, say the refinery’s decision to sell directly to large-scale consumers and bypass traditional distribution networks is threatening the survival of thousands of small and medium-scale operators.
According to the Independent Petroleum Marketers Association of Nigeria (IPMAN), the refinery’s strategy of engaging only major marketers and bulk buyers in fuel distribution will create a monopolistic structure and weaken the nation’s retail network.
“We are not against the success of the Dangote Refinery,” said Chinedu Okoronkwo, National President of IPMAN. “But if the current distribution model continues, smaller players will be edged out, leading to job losses and possible fuel scarcity at the grassroots level.”
Industry insiders say Dangote’s plan is to reduce layers in the distribution chain in order to control pricing, ensure product integrity, and maximize logistics efficiency. However, marketers argue this effectively sidelines independent dealers who form the backbone of the country’s retail petroleum market.
Several marketers have also reported that the refinery’s bulk purchasing requirements are too high for smaller firms to meet, leading to fears of consolidation that favors larger, better-capitalized companies.
In response, the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMA) has called for urgent dialogue between the Dangote Group, regulators, and stakeholders to avoid a supply chain crisis.
“We support private sector growth,” a DAPPMA statement read, “but not at the expense of industry inclusiveness and market sustainability.”
The Dangote Group has not officially responded to the backlash but has previously stated that its distribution approach is aimed at improving efficiency and reducing pump prices nationwide.
As tensions rise, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) is reportedly reviewing complaints and considering a framework to ensure fair access to refined products across the value chain.
The Dangote Refinery, commissioned in 2023, is Africa’s largest single-train facility and has been seen as a game-changer for Nigeria’s downstream sector. But its impact on existing distribution networks is quickly becoming a flashpoint in the evolving energy landscape.
