Dangote’s N720bn investment in CNG-powered trucks to save consumers N1.7trn

*The Dangote Petroleum Refinery, Lagos, says its recent investment of over N720 billion to deploy 4,000 Compressed Natural Gas-powered trucks to big-time corporate consumers is meant to lift 42 million MSMEs, stating the Nigerian Presidency, IPMAN and experts have hailed the bold move

Isola Moses | ConsumerConnect

The Dangote Petroleum Refinery, Lagos, says the company has invested over N720 billion to implement the deployment of 4,000 Compressed Natural Gas (CNG)-powered trucks.

ConsumerConnect reports the oil-refining company said its latest landmark investment in CNG will cater to nationwide distribution of petroleum products to big-time consumers.

Dangote Refinery at the weekend stated that the investment is expected to make Nigerians save over N1.7 trillion annually.

The company also discloses the bold step would see the privately-owned refinery absorb over N1.07 trillion annually in fuel distribution costs.

It further said the initiative is also poised to significantly benefit over 42 million Micro, Small and Medium Enterprises (MSMEs) by reducing energy costs and enhancing profitability.

The scheme, which eliminates transportation costs for fuel marketers and large-scale consumers, is expected to help reduce pump prices and inflation.

From 15 August, Dangote will begin the direct delivery of petrol and diesel to filling stations, industrial facilities, and other high-volume consumers.

The refinery said the initiative aims to meet Nigeria’s daily consumption of 65 million litres of refined petroleum products.

This includes 45 million litres of Premium Motor Spirit (PMS), 15 million litres of diesel, and 5 million litres of aviation fuel.

With the average logistics cost estimated at N45 per litre, the refinery will cover over N1.07 trillion annually in free distribution expenses.

Dangote Group is investing N720 billion in the acquisition of 4,000 CNG-powered trucks as well as the establishment of nationwide CNG ‘mother and daughter’ stations, among other infrastructure to implement the free distribution initiative.

This strategic programme forms part of Dangote’s broader commitment to eliminating logistics bottlenecks, enhancing energy efficiency, promoting environmental sustainability, and supporting Nigeria’s economic development.

The company noted that lower fuel distribution costs will help reduce production costs, ease inflationary pressures, and stimulate economic growth.

The initiative is also expected to resuscitate dormant filling stations, fostering job creation in the process.

Over 15,000 direct jobs are projected to be created across the logistics chain, including drivers, station managers, and attendants at the CNG stations.

The refinery also emphasised that this programme would help curb cross-border smuggling of petroleum products and support a more efficient and environmentally friendly distribution system.

Presidential endorsement and industry stakeholders’ applause

The Presidency has described the initiative as a pivotal moment in the Federal Government’s push to mainstream gas-powered transportation.

Tosin Coker, Commercial Coordinator of the Presidential Compressed Natural Gas Initiative (PCNGI), praised the move as a strong vote of confidence in Nigeria’s gas-fueled future.

“Dangote Group’s acquisition of 4,000 CNG trucks is not only impressive in scale but also highly strategic,” he said.

“It signals to the market that CNG is no longer a distant prospect but a current, practical solution to high energy costs, emissions, and supply chain challenges.

“PCNGI regards this as a milestone achievement in our efforts to accelerate gas-powered transport adoption.”

The Independent Petroleum Marketers Association of Nigeria (IPMAN) also commended the development, calling it a timely resolution to longstanding challenges in the downstream sector.

Chinedu Ukadike, National Publicity Secretary of IPMAN, stated that the new model would significantly reduce logistical burdens for independent marketers by delivering more affordable fuel directly to filling stations.

“Our pipelines have been non-functional for years, yet nothing has been done to revive the infrastructure linking the country’s 21 depots.

“We’ve had to rely on expensive transport from coastal depots,” Ukadike said.

“Dangote’s intervention lifts a huge burden off the shoulders of independent marketers.”

Development Economist and Policy Analyst, Prof. Ken Ife, said the initiative would drive down the price of PMS and yield widespread benefits for Nigerians.

Bismarck Rewane, Chief Executive Officer (CEO), Financial Derivatives Company Limited, dismissed concerns about the refinery becoming a monopoly.

Rewane argued that inefficiencies in the sector have been systemic and long-standing.

He stated that the scheme would help curb the parasitic role traditionally played by middlemen.

The expert said: “What Dangote is doing achieves two key objectives: delivering products across the entire country at a uniform price by eliminating bridging costs, and significantly reducing logistics expenses through the use of CNG-powered trucks to reach every corner of the nation.

“In economic terms, middlemen—who typically do not invest—are often viewed as parasitic, extracting margins simply for distributing goods. “Dangote is bypassing this layer by directly handling distribution and, notably, providing credit facilities to the retail end of the business.”

Kelvin Emmanuel, energy expert and co-founder of Dairy Hills, said Dangote’s decision to absorb logistics costs marks a turning point that could finally allow Nigerians to enjoy the benefits of local refining.

Energy analyst Ibukun Phillips described the move as “revolutionary”, suggesting it could reshape Nigeria’s energy sector by improving affordability and access, particularly in rural communities.

“Rural consumers, who typically pay more despite earning less, stand to benefit immensely.

“This could also revive abandoned filling stations and promote equitable distribution,” she explained.

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