The announcement made by the Dangote Refinery to begin free inter-direct distribution of petroleum products has raised a lot of dust in the nation’s downstream oil and gas sector.
The refinery announced its plans in June 2025, to commence free distribution of PMS, diesel and aviation fuel to marketers, petrol dealers, manufacturers, telecom firms, aviation, and other large users across the country.
To ensure the smooth takeoff of the scheme, the refinery invested over N720 billion to procure 4,000 CNG-powered trucks for nationwide distribution of the products, a move expected to lower logistics costs and potentially save Nigerians significant money annually.
However, like stirring the honey beehives, the initiative was greeted with backlash from the oil marketers and petroleum tanker drivers who perceived that the initiative was tailored to push them out of business.
Disgruntled with the monopolistic tendencies of the initiative, the marketers vowed a showdown with the Dangote refinery to engineer a shift.
The first association to kick against the scheme was the Natural Oil and Gas Suppliers Association of Nigeria (NOGASA), who stated that apart from replicating the monopolistic market in the cement industry, the initiative was capable of rendering their members redundant.
Speaking through its National President, Benneth Korie, NOGASA appealed to President Bola Tinubu to intervene, so as to address the concerns raised, and to also ensure that the refinery plays by the rules.
The second, is the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG), who also accused the Dangote refinery of promoting anti-union practice.
The Union through its National Executive President, Prince Williams Akporeha, accused the Dangote refinery of instructing its newly employed drivers not to belong to any union.
This was also condemned by the Nigeria Labour Congress (NLC), explaining that by seeking to recruit drivers under the condition that they must not belong to NUPENG or any union in the Oil and Gas industry, Dangote and his associates are directly violating Section 40 of the Nigerian Constitution, the Labour Act, and ILO Conventions 98 and 87 on Freedom of Association and the Right to Organise and Collectively Bargain (ratified by Nigeria in 1960).
NLC President, Comrade Joe Ajaero, posited that if allowed to stand, it would set a dangerous precedent where powerful capitalists could openly defy the laws of Nigeria, enslave workers, and destroy the very foundation of collective bargaining.
“This is a dangerous road to fascism in industrial relations, where workers are treated as slaves without voice or dignity,” he said.
Also corroborating NUPENG, the Nigerian Association of Road Transport Owners (NARTO) accused the refinery of advancing monopolistic and anti-competition practices in the downstream oil and gas sector.
NARTO National President, Yusuf Lawal Othman noted thatwhile the association recognizes and appreciates the injection of new trucks and other investments into the petroleum distribution value chain, it strongly rejects plans for free distribution of petroleum products.
The association explained that such an approach was not only unsustainable but also a deliberate attempt to undermine and eliminate the thousands of independent transporters who form the backbone of Nigeria’s petroleum distribution network.
The third, is the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN), who dismissed the notion that the Dangote Refinery and Petrochemicals is capable of meeting the nation’s petroleum demand, saying that the refinery is only contributing 30 to 35 percent ofnational demand.
DAPPMAN clarified that the balance (70%) continues to be supplied by responsible petroleum product marketers, includingits members, who import and distribute under strict regulatory oversight by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
The Executive Secretary of DAPPMAN, Olufemi Adewole, also revealed clarifiedthat the claim that the refinery offers “free delivery” was also misleading, explaining that in reality, marketers are required to lift at least 25 percentof their allocations directly from the refinery gantry and must do so using only Dangote-owned trucks, paying commercial rates based on their destination.
The arrangement, it said, imposes additional logistical and financial burdens onmarketers, limits operational flexibility, and undermines the narrative of costrelief being provided to the local market.
“Fordecades, DAPPMAN marketers have ensured uninterrupted fuel access across the country, investing in depots, trucking fleets, retail networks, and logistics and doing so even through periods of forex pressure, subsidy transitions,insecurity, and economic downturns. These contributions deserve recognition, not erasure.
“Claims that repeated fuel price reductions by the Dangote Refinery are patrioticgestures ignore their timing and market impact. These reductions were often strategically timed when other importers had active cargoes at sea or in tanks,creating price shocks that undermined competition and imposed financial strainon fellow market participants, including the refinery’s own domestic customers.
“Evenmore concerning is the refinery’s pattern of offering lower prices to international buyers while quoting higher rates to local off takers. This contradicts public-facing claims of prioritizing Nigerians and places unnecessary burden on domestic businesses already operating under tight margins.
“W ereject any insinuation that DAPPMAN members deal in “substandard” petroleumproducts. All imports are subject to independent, regulator-accreditedlaboratory testing in accordance with NMDPRA protocols and global qualitystandards.
“Ironically,the same refinery alleging superiority has on multiple occasions sought waivers to distribute products with sulphur levels above approved thresholds, a factthat calls into question its consistency and credibility on product quality.
“Nigeria’s downstream petroleum market is highly regulated, transparent, and aligned withinternational best practices. Attempts to cast doubt on the integrity of other compliant players are unfair and inaccurate,” the association added.
Responding to the allegations, the Dangote refinery said the DAPPMAN requested it to increase the price of petrol and diesel byN75 per litre, in order to allow its members to match the refinery’s gantry prices at their respective depots.
The request, the refinery disclosed, would result in the pump price of Premium Motor Spirit (PMS) anddiesel rising to as high as N950 and N1,090 per litre respectively in someparts of Nigeria, if implemented.
The refinery revealed that although it offers petroleum products to marketers at its gantry price, DAPPMAN insisted on taking delivery via coastal logistics, an option that would add N75per litre in extra costs.
“Based on daily consumption volumes of 40 million litres of Premium Motor Spirit (PMS) and 15 million litres of Automotive Gas Oil (AGO), this amounts to an additional annual cost of N1.505 trillion (N1,505,625,000,000), which they effectively asked the refineryto absorb and pass on to Nigerians.
“We wish to make it clear that we have no intention of increasing our gantry price to accommodate suchdemands, nor are we willing to pay a subsidy of over N1.5 trillion, a practice that historically defrauded the Federal Government for many years. DAPPMAN and other marketers are welcome to lift products directly from our gantry andbenefit from our logistics-free initiative,” it said.
The refinery alleged that itsrefusal to comply with DAPPMAN’s subsidy request is the core reason behind recent public criticisms and attacks.
It reiterated that the refineryhas sufficient capacity to meet domestic demand and support export as it consistently maintains a closing stock of 500 million litres of refined products in its tanks each month.
“Between June and September, the refinery exported a combined total of 3,229,881 metric tonnes of PMS, AGO,and aviation fuel, while marketers imported 3,687,828 metric tonnes over the same period, an action that amounts to dumping which is detrimental to the Nigerian economy and the wellbeing of its citizens,” it said.
While the downstream petroleum sector rumbles, Nigerians should be awakened to the consciousness that the fight is not in their interest. It’s an egocentric fight for dominance in the sector.
It should be noted that oil exports consistently account forthe vast majority of the nation’s foreign exchange earnings, often exceeding 80% of total earnings, as of Q1 2025 data.
The country’s 2025 oil revenue reached N5.21 trillion in thefirst half of the year, a significant portion of the total N15 trillion revenue target, primarily from crude oil and gas sales.
Nigeria also needs daily oil production at 2.06 millionbarrels per day with a price benchmark of $75 per barrel to fiancé government expenditure in the 2025 budget.
If the concerns are not addressed, and the sector isshut down, the implication would be grievous on the people and the nation’s economy.
