Dangote Direct Supply Cuts Middlemen, Lowers Pump Price

By Matthew Ochei

The Dangote Refinery has begun direct fuel distribution across Nigeria, a move that has lowered pump prices but unsettled traditional players in the petroleum supply chain.

According to The Punch, the refinery—Africa’s largest with a 650,000 barrels-per-day capacity—rolled out a system that delivers fuel directly to filling stations and bulk buyers using its own fleet. From September 15, petrol prices fell to ₦841 per litre in Lagos and other Southwestern states, and ₦851 in Abuja and some parts of the North, after Dangote fixed its “gantry price” at ₦820 per litre with free delivery.

As part of the new model, Dangote has invested ₦720 billion in 4,000 compressed natural gas (CNG)-powered trucks to service filling stations, bulk buyers and other major consumers nationwide.

The policy has raised concerns among fuel marketers, depot operators, and transporters.

The National Association of Road Transport Owners (NARTO), led by Yusuf Othman, warned that existing contracts could be undermined, if Dangote’s arrangement sidelines middlemen. 

NARTO members operate about 30,000 trucks and depend on agreements with oil companies for their livelihoods.

The Natural Oil & Gas Suppliers Association of Nigeria (NOGASA) also cautioned that jobs could be lost if traditional distribution channels are sidelined.

In response to pressure, the refinery has agreed to sell in bulk to marketers and depot operators, instead of supplying directly to end-users such as hotels and telecom firms. Bulk buyers are now registering on a Dangote portal, with deliveries to be handled by the new CNG-powered fleet.

While analysts say the arrangement promises lower petrol prices, reduced imports, and improved supply reliability, they warn of risks including loss of income for independent truckers, potential bottlenecks if Dangote’s fleet is overstretched, and regulatory disputes over existing agreements.

Stakeholders have urged the federal government and the Nigerian Midstream & Downstream Petroleum Regulatory Authority (NMDPRA) to ensure fair competition and protect smaller players.