There is disquiet in Nigeria’s downstream petroleum sector, driven by oil marketers’ alleged unjustifiable pricing of the commodity and the new strategy of fuel distribution by the Dangote Petroleum Refinery, scheduled to start on August 15th.
At loggerheads are the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), a coalition of licensed depot marketers, who have opposed Dangote refinery’s move, warning that the strategy could destroy thousands of businesses and create a dangerous private monopoly.
However, the position of the oil marketers has been punctured by the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), which accused them of exploiting Nigerians through inflated fuel prices even when crude oil prices drop. The association argued that Nigerians don’t benefit when the oil price drops.
“When crude oil is sold for $60 per barrel, marketers ought to sell petrol between N700 to N750 per litre; but they stuck to N900 per litre”, PENGASSAN noted.
Dangote Petroleum Refinery announced on Sunday the distribution of petroleum products nationwide, offering free logistics to large users across the country from August 15th in an initiative comprising Premium Motor Spirit (PMS) and diesel to marketers, petrol dealers, manufacturers, telecoms firms, aviation, and other large users nationwide. For the smooth commencement of the scheme, Dangote Refinery said it has procured 4,000 brand-new Compressed Natural Gas (CNG)-powered tankers for distribution, which will continue over an extended timeframe in the first phase.
“The refinery is also investing in Compressed Natural Gas (CNG) stations, commonly referred to as daughter booster stations, supported by a fleet of over 100 CNG tankers across the country to ensure seamless product distribution”, the management said.
“This strategic programme is part of our broader commitment to eliminating logistics costs, enhancing energy efficiency, promoting sustainability and supporting Nigeria’s economic development”, noted the management which said the initiative is to improve the availability and affordability of fuel, in support of broader efforts to strengthen the economy and enhance the well-being of all Nigerians.
Under this initiative, all petrol stations purchasing PMS and diesel from the Dangote Petroleum Refinery will benefit from this enhanced logistics support. 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. Players in these key sectors and others can purchase directly from the Dangote Petroleum Refinery.
In addition, the refinery will offer a credit facility to those purchasing a minimum of 500,000 litres, allowing them to obtain an additional 500,000 litres on credit for two weeks, providing a bank guarantee.
Speaking on behalf of independent retail station owners, PETROAN President Billy Gillis-Harry said the growing influence of Dangote across every layer of the petroleum value chain, from refining to supply, distribution, and retail, poses a systemic threat to market competition and the survival of smaller operators.
“We’re not against Dangote’s success. But no single company should control refining, supply, distribution, and retail all at once,” he said. “It’s a monopoly in the making, and it puts thousands of independent operators at risk.”
The refinery’s rollout plan includes bypassing traditional supply structures such as depot marketers and third-party transporters. Dangote will use a dedicated fleet of over 4,000 compressed natural gas-powered trucks to deliver fuel directly to stations. It also plans to offer credit arrangements to bulk buyers, effectively displacing many of the independent marketers who have long served as intermediaries in the fuel distribution system.
Depot marketers, many of whom operate under the Dangote Marketers Group, have described the development as a “death sentence” for their role in the downstream sector.
In a group chat, one marketer straightforwardly claimed that “The supply chain is dead,” while others warned of job losses and widespread economic fallout. “It’s an evolution masked as a revolution,” a group member said, referring to the refinery’s model. “All hell is about to break loose.”
Traditionally, independent marketers have provided vital services such as financing, logistics, and loading coordination between fuel depots and retail outlets. Fuel station owners often rely on them for credit and operational support. That entire structure now appears under threat.
Marketer Mide Loe shared how one of his clients, who owns over 15 haulage trucks, went into stunned silence upon hearing of Dangote’s direct-supply plans. “His silence was deafening,” said another marketer, Joe. “Businesses will fold up. Homes will be broken. Fathers and mothers will be rendered jobless. This is sad.”
Others expressed frustration over what they see as a lack of regulatory response. Marketers questioned the silence of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and lamented the seeming abandonment of regulatory tools like the Aquila tracking system developed by the defunct Petroleum Equalization Fund (PEF).
“What are the regulators doing?” one member asked. “Someone should provide rules of the game.”
For PETROAN and its allies, the issue isn’t about resisting change, but about protecting diversity and fairness in Nigeria’s fuel market. “This isn’t about envy,” Gillis-Harry stated. “It’s about making sure the downstream sector remains inclusive, competitive, and sustainable for everyone, not just the biggest.”
Stakeholders are calling for immediate policy interventions. They demand the enforcement of anti-monopoly provisions in the Petroleum Industry Act (PIA), open access to marine terminals and depots, pricing structures that allow independent marketers to compete, and support for third-party logistics companies.
Despite the operational efficiency promised by Dangote’s direct model including sealed, tamper-proof fuel deliveries many warn that such centralization could severely damage the ecosystem that has kept fuel flowing across Nigeria for decades.
“This isn’t a revolution,” said one marketer. “It’s the beginning of a one-man show in the downstream sector. May Nigeria succeed, but the market must remain competitive.”
As the implementation date nears, the downstream sector braces for what could be a fundamental shift—one that promises both transformation and turbulence, depending on whose interests prevail.
PENGASSAN President, Comrade Festus Osifo while briefing newsmen on the state of the sector on Monday in Abuja, added that marketers were charging unjustifiable price, which he blamed the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) for, due to its ineffective oversight duties.
He said: “In the downstream today, in the Nigerian oil and gas industry, we have seen a trend. And the trend, if you could recall, at a time when the price per litre of petrol was sold around N900 per litre, you realise that the international crude price was somewhere around $80 per barrel.
“So we have been monitoring the trend. When the crude price reduced to around $60 per barrel, we did not see a commensurate reduction in the pump price. Because naturally, two things contribute principally to the price of PMS, for example, or the price of petroleum products.
“One is the crude price, and the second is the exchange rate. So, these are the two highest contributory factors. In fact, they contribute up to 80 per cent of what the final price of PMS would be.
“So, what that means is that when the crude price reduces, the PMS price also reduces, most especially when the exchange rate has been relatively constant. So, if crude price was somewhere around $80 per barrel, and we were having pump price at about 900 Naira per litre or thereabout, today, at a time, crude price hovers around $62 to $65 per barrel. But we only saw a marginal reduction in the pump price.
“And if you do the calculation, you will realise that it is, I mean, Nigerians were exploited within that period. Because there is what we call PLATT. If you go online, you are going to see the PLATT cost per cubic metre of PMS
“And when you convert that to litres, and you bring it down to our Naira, you are going to see that at a time when crude price was around $60 per barrel, we should be buying our PMS somewhere around N700 to N750 per litre. That is how it should be when you do the calculation properly.
“Yes, we understand that people have invested in their business, and they want to make a profit. It is the responsibility of businessmen to maximise profit. We don’t begrudge any business organisation that wants to maximise profit. That is why we have the regulators.”
Osifo urged NMDPRA to ensure it publishes pricing templates regularly, as it was the only way to ensure transparency and prevent exploitation under the guise of deregulation.
“It is the function of the regulator to ensure that Nigerians are not exploited. So, we call on NMDPRA to have a platform with which they publish what the price ranges could be, looking at what the price is and telling it to our local price here in Nigeria. So, we call on them to be allowed to that responsibility. We call on them to do everything possible to ensure that Nigerians are not exploited.
“Because if this trend continues, it means that even if crude price comes down to $50 per barrel, we will not see appreciable gains. The way those that have invested in the industry works is that tomorrow when the price of crude rises to $80 or $90 per barrel, we are going to pay more. So why can’t we reap the benefit when the price comes down?
“We don’t begrudge businesses for making profits. But it is the regulator’s responsibility to protect the people. If this exploitation continues, Nigerians will never benefit from global oil price drops. They will only bear the burden when prices rise.”
Expressing concerns over the continued shutdown of the Port Harcourt Refinery over periodic maintenance, PENGASSAN urged the Nigerian National Petroleum Company (NNPC) limited to look at the operational model of the refinery and adopt the Nigeria Liquefied Natural Gas (NLNG) model in to ensure the refinery was managed optimally.
“We are calling on government and the handlers of the refineries, the management of NNPC Limited, to look at the full scope of the refineries, to look at the operational model of the refineries, and to yield to the time-tested call that we have made in PENGASSAN for over 15 years now that government at all level should come together and ensure that our refineries are managed optimally.
“We have called that government should bring about the NLNG model in the management of the refineries, because that model has worked.
A model where you have the international oil companies partnering with the NNPCL to be able to drive value in the NLNG. So why can’t we bring about that same model, that similar model in the management of our refineries?
“By bringing in investors, internationally certified investors that have built or managed refineries all over the world. Government will now reduce their shareholding to maximum of 49%, and you allow these investors to take the lion’s share as it is today in NLNG, where the private companies, Shell, Total Energies, and E&P, they have combined shares of 51%, the government has 49%, and this model has worked. When this is done, we will reduce politics, reduce government interference at all levels.”