Oil Marketers Urge FG to Reconsider Dangote Refinery’s Direct Distribution Plan

Oil marketers, under the Natural Oil and Gas Suppliers Association of Nigeria (NOGASA), have called on the federal government to review Dangote Refinery’s plan to directly distribute petroleum products to end-users, citing potential disruptions to the supply chain and job losses in the downstream sector.

The appeal was made by NOGASA President, Benneth Korie, during the association’s Annual General Meeting in Abuja.

Korie urged President Bola Tinubu to intervene, arguing that the refinery’s model, set to begin direct sales of petrol and diesel to industrial users and marketers from August 15, could sideline independent marketers and destabilize the supply chain.

He warned that with over 50,000 filling stations in Nigeria, direct distribution could lead to scarcity, insecurity, and economic challenges.Dangote Refinery defended its plan, stating it aims to reduce logistics costs and enhance efficiency.

However, Korie highlighted past issues with similar models, stressing the need for the government to ensure marketers can continue their operations to maintain stability in the sector.

Also speaking, Billy Gillis-Harry, National President of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), said Dangote’s entry into the distribution chain could reduce competition.

“This massive refinery is expected to satisfy domestic fuel demand and export surplus products,” he said. “We are concerned that the company may use its market power to fix prices and limit competition, similar to what we’ve seen in other sectors.”

He also cited Dangote’s planned rollout of 4,000 Compressed Natural Gas-powered trucks as a development that may displace existing truck operators and drivers.

“This shift could lead to widespread job losses in the industry,” he said. “We hereby call on the Authority Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and the Minister of State for Petroleum to put in place price control mechanisms to prevent any form of monopoly.”

At the meeting, a representative of the House of Representatives Committee on Petroleum Resources (Downstream) said lawmakers are monitoring developments around the refinery’s distribution plans. Ahmed Saba, who represented the committee chairman Ikeagwuonu Ugochinyere, said the National Assembly is reviewing how the move aligns with the Petroleum Industry Act (PIA).

“This is a big change, and I want to assure you that we are carefully looking into this situation,” Mr Saba said. “Our goal is to create a situation where everyone wins, following the rules set in the Petroleum Industry Act.”

He said the PIA is intended to improve transparency and accountability in the sector and that its implementation requires cooperation between government and private players.

“By working together, we can remove existing barriers, create a fairer and more competitive environment, and ultimately provide a more dependable and efficient system for distributing petroleum products to all Nigerians,” he said.