Fears of a Dangote monopoly spurs backlash against his fuel distribution plan

Business Insider

17-06-2025

The Dangote Petroleum Refinery announced a bold plan to deliver fuel directly to Nigerian gas stations on August 15, 2025, which could revolutionize the nation's downstream petroleum industry.
The Dangote Petroleum Refinery plans to directly supply fuel to Nigerian gas stations starting August 15, 2025.
The initiative includes complimentary logistics, impacting customers like fuel marketers, manufacturers, and more.
The Products Retail Outlets Owners Association (PETROAN) opposes the move, citing market destabilization risks.
With free logistics provided as a sweetener to improve distribution, the company declared that it would start supplying Premium Motor Spirit (PMS) and diesel to a broad spectrum of customers, including fuel marketers, gasoline dealers, manufacturers, telecom companies, aviation companies, and other large users.
However, the industry's biggest players have swiftly criticized and opposed what was seen as a game-changer.
The Products Retail Outlets Owners Association (PETROAN), which represents the interests of retail fuel businesses across the country, has publicly opposed the proposal, as reported by the Punch.
The organization claims that Dangote's desire to function as both a producer and a distributor of petroleum products is an overreach that might destabilize the sector and result in significant job losses.
What PETROAN said
'The company may leverage its market power to fix prices, limit competition, and exploit consumers, much like it has done in other sectors,' the group disclosed via a statement.
'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,' the statement added.
This is not the first time that concerns have been voiced about the refinery's expanding impact. PETROAN cited similar tendencies in other industries where Dangote Group has a significant presence, accusing the conglomerate of abusing its enormous market clout to dominate and suppress competition.
There have been claims that allowing Dangote to dominate both refining and retailing risks distorting pricing processes and reducing transparency in Nigeria's petroleum industry, which is already plagued by inefficiency, opacity, and regional inequities.
PETROAN is now urging the Nigerian government to intervene and regulate the refinery's role in fuel distribution to prevent market exploitation and maintain a level playing field.
'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.