Oil marketers under the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) have raised the alarm over the Dangote Petroleum Refinery’s new fuel distribution strategy, warning that it could cripple existing businesses and lead to widespread job losses across the country.
In a statement issued on Monday and signed by PETROAN’s Publicity Secretary, Joseph Obele, the association expressed strong opposition to the Dangote refinery’s plan to distribute Premium Motor Spirit (PMS) and diesel directly to retail filling stations and other end-users nationwide starting August 15, 2025.
The marketers said the move threatens to create a monopolistic hold on Nigeria’s downstream petroleum sector. According to PETROAN, the refinery, which is capable of processing 650,000 barrels of crude oil per day, should be focused on competing with international refineries, not acting as a distributor within the local market.
“The refinery’s role is to produce and supply petroleum products for national consumption and export, not to engage in retail distribution,” the association said.
PETROAN warned that Dangote’s direct-to-retail approach could push many independent fuel marketers and truck owners out of business. The association cited the introduction of 4,000 Compressed Natural Gas (CNG)-powered tankers by the Dangote group as a looming threat to thousands of existing diesel truck operators, who may lose their jobs and contracts due to the cost-efficiency of the CNG trucks.
“The strategy being deployed appears to be a classic case of price penetration, where Dangote might initially lower prices to dominate the market, only to drive out competition and eventually control prices unchallenged,” the group stated.
The association further noted that modular refineries, small-scale suppliers, tank farm owners, jetty operators, and fuel logistics providers could all suffer as Dangote bypasses traditional supply chains. Already, PETROAN revealed that the deregulation of the downstream sector in 2023 has seen over 4,900 retail outlets shut down, out of about 7,000 previously in operation.
In addition, 70 tank farms and 95 jetties across the country have reportedly become inactive, with business activities significantly declining among players in the fuel importation and logistics value chain.
Despite PETROAN’s concerns, Dangote Refinery has maintained that the new model will lower fuel prices at the pump, especially in rural and underserved areas. According to the company, the initiative will eliminate middlemen, allowing petrol station owners to purchase products directly and benefit from free delivery.
The refinery insists that its plan will boost fuel availability, improve energy distribution nationwide, support local businesses, increase government revenue, and strengthen Nigeria’s energy security.
Still, PETROAN called on the Nigerian Midstream and Downstream Petroleum Regulatory Authority and the Ministry of Petroleum Resources to intervene and implement pricing regulations to prevent monopolistic practices.
Dr. Billy Gillis-Harry, National President of PETROAN, emphasised the need to protect market competition, warning that Dangote’s growing dominance could discourage investment, stifle smaller players, and negatively affect employment and consumer welfare.
He urged regulators to promote a level playing field by ensuring strong oversight, encouraging local refining, and providing alternative livelihoods for those who may be displaced by the new fuel distribution regime.
Meanwhile, some industry analysts and stakeholders have defended Dangote’s move, describing it as a step toward reducing fuel costs, enhancing efficiency, and ensuring greater accessibility across Nigeria’s urban and rural areas.
