KEY POINTS
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Dangote refinery set 500,000-litre minimum for free delivery.
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Independent marketers say the threshold fuels middlemen’s return.
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Transport owners warn of contract breaches and lost investment.
The Dangote Petroleum Refinery’s new condition for free product delivery is rattling Nigeria’s downstream sector. The refinery this week confirmed that marketers must purchase a minimum of 500,000 litres of petrol to qualify for its free transport programme, a requirement that translates to at least ₦410 million at the refinery’s gantry price of ₦820 per litre.
Marketers say Dangote threshold is unworkable
Refinery officials, speaking on background, said the minimum order quantity was set at half a million litres. That amount equals about 11 trucks, each holding 45,000 litres. The policy has drawn criticism from smaller independent operators, many of whom say the benchmark is far beyond their reach.
“Yes, it is true. We have to buy a minimum of 500,000 litres. That requirement has not been easy to follow,” said Chinedu Ukadike, National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria. He said the association is now pushing members to pool resources to meet the threshold, warning that without collaboration, middlemen could hijack the system.
“The current situation would bring back middlemen. We used to buy one truck before. Now we must buy 11. That is why we are encouraging members to group themselves to access products directly from Dangote,” he explained.
Energy analyst Olatide Jeremiah, Chief Executive Officer of Petroleumprice.ng, was blunt in his assessment. “At ₦820 per litre, marketers must raise over ₦400 million to qualify. How many operators can afford that?” he asked. “This will only strengthen middlemen and defeat the goal of cheaper supply.”
Dangote threshold fuels wider industry tensions
Earlier this month, the refinery launched its free delivery scheme, backed by 1,000 compressed natural gas-powered trucks, aiming to cut logistics costs and reduce pump prices. The 650,000-barrel-per-day facility, Africa’s largest, began commercial operations last year and has since been seen as central to Nigeria’s hopes of ending reliance on imported fuel.
Several larger marketers, including Conoil Plc, Eterna Plc, Golden Super, Nepal Energies, Kifayat Global Energy, and Riquest & Gas, have already signed up to benefit from the initiative. But opposition is growing among fuel transporters. Yusuf Othman, President of the National Association of Road Transport Owners, said Dangote’s plan undermines agreements with truck owners who borrowed heavily from banks to purchase vehicles for distribution.
“NARTO members own over 30,000 trucks, and we cannot do fuel distribution free of charge. If Dangote delivers fuel directly, those agreements collapse,” Othman said. He also argued that the arrangement violates provisions of the Petroleum Industry Act.
Analysts warn that instead of lowering costs, the 500,000-litre requirement could marginalize smaller operators, forcing them to rely on wholesalers. That reliance, they argue, risks keeping pump prices elevated and sustaining the same inefficiencies the refinery had pledged to eliminate, according to Punch.
