IPMAN, PETROAN disagree on alleged ‘full monopoly’, benefits of Dangote’s fuel distribution plan

*The Petroleum Products Retail Outlets Owners Association of Nigeria opposes Dangote Petroleum Refinery’s deployment of 4,000 new CNG-powered oil tankers for direct fuel distribution to big-time consumers, but the leadership of IPMAN disagrees with the former on possible ‘full monopoly’ and job losses in the downstream petroleum sector

Gbenga Kayode | ConsumerConnect

The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has expressed strong reservations over the Dangote Petroleum Refinery’s recent plan to distribute fuel, including the Premium Motor Spirit (PMS), otherwise called petrol, and diesel directly to filling stations, and other big-ticket businesses across the West African country.

ConsumerConnect reports PETROAN has openly cautioned, that Dangote Refinery’s lofty oil distribution programme could lead to job losses, and position the company in a monopoly-like position in the downstream petroleum sector of the economy.

Earlier, Dangote Refinery Sunday, June 15, 2025, had stated that owners of filling stations could make direct purchases and get free delivery without the involvement of third parties any longer.

A cross-section of Dangote Petroleum Refinery’s new CNG-powered oil trucks

The company disclosed that the new fuel distribution scheme would lower fuel prices at retail outlets while improving fuel accessibility for both urban and rural communities.

Dangote also stressed the new initiative would support local economies and businesses, increase government revenue and strengthen long-term energy security and national efficiency.

According to Dangote, “key sectors such as manufacturing, telecommunications, and others will also gain from this transformative initiative, as reduced fuel costs will contribute to lower production costs, reduced inflation, and foster economic growth.”

The company also explained: “Players in these key sectors and others can purchase directly from the Dangote Petroleum Refinery.”

Dangote’s proposal may lead to price fixing, limited competition: Marketers

However, the oil marketers’ Association also said with a production capacity of 650,000 barrels per day (bpd), Dangote Petroleum Refinery should be competing with global refineries, not operating as a distributor in the downstream sector in Nigeria.

Speaking on the development, Joseph Obele, Publicity Secretary of PETROAN, in a statement Monday, June 16, 2025, said: “This massive refinery, one of the largest in sub-Saharan Africa, is expected to satisfy domestic fuel demand and export surplus products.”

The oil marketers also said that they previously raised the alarm about Dangote’s possible intentions to dominate the downstream sector of the Nigerian economy.

They equally cited concerns that “the company may leverage its market power to fix prices, limit competition, and exploit consumers, much like it has done in other sectors.”

PETROAN warned that Dangote’s moves might include a pricing penetration strategy, where the company would reduce prices to capture undue market share, with the ultimate goal of forcing other filling station operators to quit the market altogether.

Obele stated: “This could lead to a massive shutdown of filling stations across Nigeria, resulting in widespread job losses.

“The introduction of 4,000 brand-new Compressed Natural Gas-powered tankers by the Dangote Refinery poses a significant threat to the livelihoods of thousands of truck drivers and owners.

“While CNG trucks may offer a lower cost of transporting petroleum products, this shift could lead to widespread job losses in the industry.”

PETROAN further argued that Dangote’s adoption of what it has described as a “forward integration strategy” would greatly affect several other industry stakeholders, including modular refineries, whose operations and market share might be threatened by “Dangote’s dominance”.

Industry dominance will threaten telecoms companies’ diesel supply chain, says PETROAN

In regard to other existing petroleum product truck owners, the Association said that job losses and reduced business opportunities could result from Dangote’s direct supply and the use of CNG-powered tankers.

PETROAN also stated that several filling stations could be forced to shut down while local suppliers of petroleum products might be negatively impacted by the refinery’s direct supply to big-time consumers.

According to the oil marketers, Dangote’s potential dominance could also threaten telecoms companies’ diesel suppliers’ operations and market share.

The oil dealers as well explained: “It is obvious that Dangote plans to gain full monopoly of the downstream sector, which would enable the company to exploit Nigeria’s petroleum consumers.

“This could lead to higher prices, reduced competition, and decreased economic efficiency.

Gillis-Harry tasks Minister, NMDPRA on price control, consumer protection

The statement quoted to have said: “The National President of PETROAN, Dr. Billy Gillis-Harry, calls on the Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority and the Minister of State for Petroleum Resources to put in place price control mechanisms to prevent any form of monopoly.”

The Association said Gillis-Harry also stressed that competition should rather be encouraged to protect energy consumers and promote economic efficiency.

The National President of PETROAN averred that Dangote Refinery’s market  dominance could stifle competition, and its operations could negatively impact employment opportunities while promoting “anticompetitive” behaviours in the economy.

He, therefore, advocated a competitive refining market environment, strong regulatory agencies to monitor market behaviour, adequate crude oil supply to local refineries, and alternative livelihoods for affected workers.

Checks also indicated that about 2,100 petrol retail outlet owners, 70 tank farm operators, and 95 jetty managers across Nigeria might be forced out of business as Dangote Petroleum Refinery plans to take “full control” of fuel distribution in Nigeria.

In view of their years of dependence on imported petrol, Nigerian oil marketers reportedly, have invested heavily in downstream industry infrastructure, such as tank farms, jetties, and logistics systems to facilitate fuel importation.

In connection with the new Dangote-led supply process, many of these costly investments risk being rendered obsolete, as the entire distribution chain would now be bypassed, The Punch report said.

Besides, oil marketers recently raised the alarm that thousands of independent operators are reducing their activities, as they attributed the development to mounting financial losses triggered by the volatile and unpredictable pricing of Premium Motor Spirit by the Dangote Refinery and fuel importers in the country.

The situation forced over 4,900 petrol retail outlet owners from 7,000 outlets before the deregulation of the sector in 2023. Similarly, 70 tank farm owners have been compelled to cease operations in the past two years, leaving their facilities abandoned and idle as retailers and station owners increasingly avoid utilising their services.

The number of retailers dropped from 120 to 50 in two years. Also, a total of 95 jetty operators across the country are now facing an uncertain future.

Expert: Dangote’s programme a ‘revolutionary shift’ in downstream oil & gas Industry

Also commenting on the Dangote Refinery’s fuel distribution network plan in Nigeria, Olatide Jeremiah, Chief Executive Officer (CEO) of PetroleumPrice.ng, nonetheless, described the scheme as “a revolutionary shift” for the downstream oil and gas industry.

Olatide stated: “This is one of the biggest transformations in the history of the downstream sector.

“I commend this initiative by Dangote Refinery because it will reduce abnormal middleman costs and ultimately lower fuel prices for end users.”

He declared: “The old era of manipulative pricing is gone.”

IPMAN counters PETROAN on Dangote’s gaining ‘full monopoly’, job losses

Contrary to PETROAN’s claims, Chinedu Ukadike, National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), rather described Dangote’s scheme as a welcome development, according to report.

Ukadike emphasised that the Dangote Refinery’s fuel distribution initiative would create more jobs and make petroleum products more affordable for consumers.

He averred: “It is a welcome development. We, the independent marketers, are in support of anything that will give Nigerians energy security.

“As it is, wherever our trucks cannot reach, Dangote trucks will get there.

“That is a good thing. The more the supply, the cheaper the price.”

In opposition to PETROAN’s anxiety over job security, Ukadike disagreed with claims that the direct sale of petrol by Dangote would lead to job losses in Nigeria.

The IPMAN National Publicity Secretary asserted: “I don’t agree that it will lead to job losses.

“Instead, it will create more jobs as more drivers would be employed by the refinery.”

The Dangote Petroleum Refinery has said the fuel distribution network initiative is the first phase of the programme would continue over an extended timeframe.

The company stated: “The refinery also said it would invest in CNG daughter booster stations, supported by a fleet of over 100 CNG tankers across the country to ensure seamless product distribution.

“This strategic programme is part of our broader commitment to eliminating logistics costs, enhancing energy efficiency, promoting sustainability, and supporting Nigeria’s economic development.”

The oil-refining company further assured Nigerian energy consumers, stating “it affirms our dedication to improving the availability and affordability of fuel, in support of broader efforts to strengthen the economy and improve the well-being of all Nigerians.”

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