The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has raised serious concerns over the fuel distribution strategy recently adopted by Dangote Petroleum Refinery, warning that it could spark widespread job losses and the shutdown of retail businesses nationwide.
In a statement issued Monday, PETROAN National President, Dr Billy Gillis-Harry, said Dangote’s move to directly distribute Premium Motor Spirit (PMS) and diesel to large-scale users and marketers from August 15 threatens to upend Nigeria’s downstream petroleum sector.
Dangote Refinery had on Sunday unveiled a major distribution initiative, supported by the deployment of 4,000 brand-new Compressed Natural Gas (CNG)-powered tankers, free logistics, and the development of CNG booster stations across the country. The initiative, it said, aims to enhance national supply efficiency and cut logistics costs.
But PETROAN warned that the plan amounts to a “forward integration strategy in disguise” — one that could lead to the creation of a monopoly in the fuel distribution chain.
“This massive refinery, one of the largest in sub-Saharan Africa with a capacity of 650,000 barrels per day, should be operating at the global level — exporting products and fulfilling national demand — not venturing into retail distribution to compete with small filling stations,” Gillis-Harry said.
According to him, the adoption of this approach would severely impact several stakeholders in the petroleum distribution ecosystem:
- Filling Station Operators risk being forced out of business due to what PETROAN describes as a pricing penetration strategy, where Dangote could initially underprice competitors to gain market dominance.
- Truck Owners and Drivers may lose jobs, as Dangote’s 4,000-strong CNG-powered fleet reduces demand for independent haulage operators.
- Modular Refineries could suffer reduced market access, unable to match Dangote’s scale and pricing flexibility.
- Telecom diesel suppliers and other local vendors may be squeezed out, as Dangote seeks to deal directly with end users.
“We’re looking at the potential collapse of hundreds of fuel stations and loss of thousands of jobs if this is allowed to continue unchecked,” Gillis-Harry said.
PETROAN urged the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and the Ministry of Petroleum Resources to take swift action. The association is calling for the establishment of price control mechanisms to safeguard fair competition and prevent monopolistic practices.
“It’s not just about fuel,” he added. “It’s about the future of an entire sector and the livelihoods it sustains.”
