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Business Insider
5 days ago
- Business
- Business Insider
How Dangote's 4,000 CNG trucks could reshape fuel supply in Nigeria
On August 15, Dangote Refinery will send out a fleet of 4,000 Compressed Natural Gas tanker trucks. With over 100 new CNG refuelling hubs, the idea is to deliver petrol and diesel straight from the refinery to retailers, manufacturers, telecoms, and airports. But this isn't just a publicity stunt. It's a smart move designed to cut costs and change fuel logistics in Nigeria. Dangote Refinery plans to deploy 4,000 CNG tanker trucks starting August 15. CNG truck implementation is anticipated to cut logistics expenses and stabilize fuel prices. While concerns about monopolization persist, supporters believe market efficiency will benefit consumers. What's driving this Dangote's refinery is running at about 85 per cent of its 650,000-barrels-per-day capacity, making it one of the world's largest single-train facilities. That size matters. A larger operation means a lower cost per barrel. Now, introduce CNG trucks, which are roughly 40 per cent cheaper to run than standard diesel tankers. When you combine those two, you eliminate a significant portion of the usual logistics markup that is factored into pump prices. Nigeria's downstream sector has been deregulated for years. Prices respond to global crude oil prices, exchange rates, and transportation costs. By taking control of the whole chain from refinery to delivery, Dangote can potentially pass on savings directly to customers and bulk buyers. Some voice worries about it being a monopoly. But there are now nine modular refineries in operation alongside the national NNPC. And registration is open to new entrants. Dangote is smart about using vertical integration to stay competitive, rather than shutting others out. Why it matters now Oil prices have been volatile. Brent crude has jumped from around $64 to $77 a barrel due to rising tensions in the Middle East. And Goldman Sachs warned that it could climb to $100 to $110 if things worsen in the Strait of Hormuz. Usually, that would drive up prices for Nigerian consumers. Dangote's logistics buffer could help prevent pump prices from spiking past ₦1,000 per litre. Although full details haven't been made public, sources indicate that early deployment will prioritise major commercial hubs, such as Lagos, Abuja, Port Harcourt, Kano, and Onitsha. The 100+ CNG refuelling stations are expected to roll out in stages, starting alongside the truck deployment in August and continuing through early 2026. This infrastructure will be critical. Without a strong network of refuelling hubs, truck efficiency could be hampered. However, Dangote's investment reportedly falls within the $250–280 million range for trucks and stations, showing a serious commitment to making it work. What people are saying The reaction from independent fuel marketers has been mixed. While some see opportunity in cheaper supply, others feel threatened. PETROAN (Petroleum Products Retail Outlets Owners Association of Nigeria) has warned that the direct delivery model may 'wipe out' smaller players who rely on older, more costly supply chains. Many worry about job losses, increased consolidation, and an eventual squeeze on competition. Yet, Dangote's supporters argue that he's simply making the system more efficient. 'If other players can't compete, that's not his fault,' one industry observer told us. 'This is what deregulation is supposed to look like.' So far, the federal government has not issued a formal response to Dangote's CNG rollout. However, there's speculation that regulators may need to intervene if competition concerns escalate. They could establish new guidelines for downstream market conduct or offer incentives to assist other players in transitioning to CNG. There's also an expectation that the government may publicly endorse the environmental angle, since reducing diesel reliance aligns with Nigeria's climate goals. What it all boils down to For you at the pump: Expect more stable or possibly lower prices, despite global oil volatility. For factories and telecoms, fuel is a significant portion of their energy budget. Cutting delivery costs frees up resources for lower production costs. For smaller fuel players: They'll need to innovate, partner up, or risk being squeezed out. For the economy: lower fuel costs could translate to increased production, higher employment, and additional tax revenue for government coffers. Final takeaway Dangote is using its scale and control over transportation to beat inefficiencies. He knows that if logistics costs decrease at the pump, his market share and profits will increase. The big test starts August 15. Will consumers see the savings on their receipts? Will rural areas get the same fuel price as Lagos? And can smaller operators find a way to keep up?
Bloomberg
6 days ago
- Business
- Bloomberg
Nigeria Arrests Ex-CFO of State Oil Firm Over Alleged Fraud
Nigeria's anti-graft authorities arrested the former chief financial officer of the state oil company and a former head of a refinery in connection with an alleged misappropriation of funds. The Economic and Financial Crimes Commission said it had detained ex-CFO Umar Ajiya Isa and Jimoh Olasunkanmi, the former managing director of Nigeria's Warri refinery.
AFP
23-06-2025
- Politics
- AFP
Posts mislead with claims of Nigeria's southeast being excluded from development projects
'Student Loan excluded South East, Jamb failed South East, Sea port, none in South East, NNPC/FIRS/Customs none from South East, Int'l Airport none in South East, Railway none in South East, Military checkpoints, everywhere in South East,' reads a post shared more than 900 times on Facebook. 'When they cry, you call them IPOB,' concludes the post, published on May 19, 2025. The post was shared by a page belonging to Nigerian singer Charles Oputa, popularly known as 'Charly Boy', to his 180,000 followers. AFP Fact Check has previously debunked claims by Charly Boy (here, here, here and here). Image Screenshot of the misleading Facebook post, taken on June 16, 2025 Nigeria's southeast comprises the states of Abia, Anambra, Ebonyi, Enugu and Imo. A previous unilateral declaration of independence in the region and the creation of the republic of Biafra in 1967 led to a 30-month civil war that claimed more than one million lives, most of them Igbos, from the effects of conflict, starvation and disease. In 2015, renewed protests for Biafran independence re-emerged after decades, with Nnamdi Kanu as a leading figure. He was arrested in Kenya and extradited to Nigeria on June 27, 2021. He faces charges related to treason (archived here). His trial began afresh on March 21, 2025, after the former judge recused herself (archived here). However, the posts claim that the region has been excluded from infrastructural and development projects is misleading. Loan programme The claim that the southeast region was excluded from a national student loan programme is false. The programme was introduced by the Bola Tinubu administration in May 2024 to encourage more people to pursue higher education (archived here). As of May 2025, the Nigeria Education Loan Fund (NELFUND) said it had received over a million loan applications for tuition and upkeep from about 629,000 students (archived here). Data published by the fund showed that a little more than 40,000 students from the southeast had submitted over 57,000 loan applications. Image Screenshot of the loan disbursement dashboard taken on June 18, 2025 JAMB failure The claim about JAMB failure refers to the entry examination taken by teenagers who want to pursue tertiary education. The exam, Unified Tertiary Matriculation Examination (UTME), is coordinated by the Joint Admissions and Matriculation Board (JAMB). JAMB reported mass failure in the 2025 edition of the examination, where 78% of the candidates scored less than 200 out of the maximum 400 points (archived here). The failure was later attributed to a technical glitch that affected students in the Lagos and southeast zones. About 206,000 students were affected in Lagos and 173,387 students were affected in the southeast zone (archived here). So this claim is true, though not limited to the southeast. Seaport The claim that there is no seaport in the southeast region of Nigeria is correct. Nigeria currently has seven seaports, which are all located in the southwest and south-south regions due to their proximity to the Atlantic Ocean (archived here). The southeast region, meanwhile, has rivers that run into the ocean but no coastal land. However, the Onitsha River Port – while not a seaport – is located in Anambra state in southeast Nigeria. The river port has reported receiving barges and containers in recent years (archived here and here). There is also an inland dry port under construction in Aba, Abia state (archived here). Inclusion in agencies The claim that there is no one from the southeast region in the Nigerian National Petroleum Corporation Limited (NNPCL), the Federal Inland Revenue Service (FIRS) and the Nigerian Customs Service is misleading. Although the heads of these agencies are not from the southeast, there are other people from the southeast in top positions at these agencies, including the vice president of business services at the NNPCL (archived here). The FIRS Act also mandates that the management team must have a representative from each geopolitical zone, one of which is the southeast (archived here). This rule also applies to the Nigeria Customs Service (archived here). International airport The claim about the absence of an international airport in the southeast is false. The Akanu Ibiam International Airport is located in Enugu (archived here). However, the airports in Lagos and Abuja enjoy more passenger traffic (archived here). Railways The claim that there are no rail lines in the southeast region is false. In November 2024, the government completed and handed over the Port Harcourt-Aba Railway to the Nigeria Railway Corporation to start operations (archived here). In December 2024, the NRC said the trains transport between 500 and 900 passengers per trip (archived here). Military checkpoints The claim that military checkpoints are common in the southeast is true. Due to insecurity (archived here), Mohammed Abubakar, the minister of defence, last year pledged to ramp up security measures in the region with the stated aim of ensuring stability for businesses (archived here). Military checkpoints are also common in the northern region due to efforts to flush out armed groups like Boko Haram and conflicts between Fulani herders and farmers that have resulted in significant casualties (archived here).
Yahoo
19-06-2025
- Automotive
- Yahoo
Shortages hit Nigeria's drive towards natural gas-fuelled cars
Motorists in Nigerian cities are spending hours, or even days, queuing for natural gas to power their cars after the government promoted its use as an alternative fuel. Some are so frustrated they say they regret the decision to convert their vehicle engines to use compressed natural gas (CNG) instead of petrol or diesel. Murtala Ishola, who is in his early 60s, said he was used to queuing for hours to fill up his gas tank but recently it had become a days-long wait. "I have been here for the 5th day," he told AFP outside a filling station in the capital Abuja. Nigeria is promoting CNG as a solution to alleviate perennial fuel shortages and the five-fold price hike that followed the abolition of petroleum fuel subsidies by President Bola Tinubu in May 2023. The oil-rich country has long been one of Africa's top exporters of crude but struggles to provide refined fuel to domestic users. Four months after scrapping the fuel subsidies, Tinubu established the Presidential Compressed Natural Gas Initiative (PCNGI) to drive CNG adoption and ease Nigeria into a cleaner energy era. Experts say mass adoption of CNG will reduce greenhouse gas emissions, improve air quality and cut maintenance costs. By the end of last year, approximately 100,000 cars had been converted, with more than $200 million already invested in the scheme, according to the government. With about 12 million vehicles on Nigerian roads, the government aims to convert one million commercial vehicles by 2026. But many of those whose cars now use the gas in Abuja say that the long wait in queues erodes the gains of the conversion. - 'Plan loses credibility'- - A fuel attendant told AFP on condition of anonymity that the CNG shortage was primarily due to logistics problems -- inadequate delivery trucks and bad roads from the source. Gas used in Abuja comes by road from the south-central state of Kogi, around 235 kilometres (146 miles) from the capital. The gas, mostly made of methane, is extracted from underground in a process similar to crude oil production and then compressed for storage and transportation. People also complain that fuelling stations are too few and far between. PCNGI officials did not respond to AFP requests for comment. However, the state-run Nigerian National Petroleum Company (NNPC) promised in February to improve supplies. Nigeria's CNG market operates under a state-backed hybrid model. The NNPC controls upstream gas supply, while licensed private firms handle distribution under the oversight of the Nigerian Midstream and Downstream Petroleum Regulatory Authority, another state oil firm. The gas is eventually retailed out to motorists through independent stations operated by marketers. However, with limited CNG stations in the capital, Ishola said he may be forced "to revert to petrol", which is nearly four times more expensive than gas. "I have been here with others since Monday morning," a visibly angry Ibrahim Halilu told AFP on a Friday. A commuter vehicle driver Akande George said the trouble he endures to refuel his car is forcing him to rethink his options. "I may leave this commercial driving life for... farming," he said. "I am getting older and can't keep pushing these daily struggles." Experts warn that shortages risk stalling or derailing the national plan to transition from petrol in Africa's leading crude producer. "One of the key success factors in any fuel-switching programme is consumer confidence in fuel availability," said Ayodele Oni, a legal expert in energy and commercial law. "If people cannot consistently access CNG, the plan loses credibility, both among the public and potential private sector investors. "The shortages could weaken momentum, create implementation delays and reduce the expected economic and environmental benefits of the programme," he added. su/tba/sn/kjm
Yahoo
11-06-2025
- Business
- Yahoo
Nigeria's $5bn Aramco loan stalled by oil price dip
Nigeria and Saudi Arabian oil giant Aramco's discussions regarding a $5bn oil-backed loan have hit a snag following a significant drop in crude oil prices, reported Reuters, citing sources. The development has raised concerns among potential banks that were expected to support the agreement. The proposed facility represents Nigeria's largest oil-backed loan to date and Saudi Arabia's first major involvement in the country's financing. However, the recent decline in oil prices, with Brent crude falling around 20% to approximately $65 per barrel, from more than $82 in January, has cast doubt on the size of the deal. Nigerian President Bola Tinubu initiated the loan discussions during a meeting with Saudi Crown Prince Mohammed bin Salman at the Saudi-African Summit in Riyadh last November. The loan is intended to be part of a larger $21.5bn foreign borrowing plan proposed by Tinubu to support the national budget. The drop in oil prices has complicated the negotiations, as Nigeria may require a greater volume of oil to secure the loan. Banks expected to co-fund the loan alongside Aramco have expressed concerns about the reliability of oil delivery, which has slowed the progress of the talks. Gulf banks and at least one African bank are reportedly involved in the discussions, although their identities have not been disclosed. Saudi Aramco, Nigeria's state-owned oil company NNPC, and Nigeria's finance and petroleum ministries have not commented on the ongoing discussions. Nigeria, with a history of utilising and repaying oil-backed loans for various financial needs, would need to back the Aramco loan with at least 100,000 barrels of oil per day (bopd). The country is already using at least 300,000bopd to service existing oil-backed loans, with one such facility anticipated to be repaid this month. Furthermore, the lower oil prices necessitate NNPC to allocate more crude oil to joint venture partners, ranging from international companies such as Shell to local operators like Oando or Seplat, to cover operational costs. "You have to either find more oil, or find a way to renegotiate those deals," mentioned one of the sources. Nigerian trading firm Oando is expected to handle the offtake of the physical cargoes, although the company has not provided any comment. To alleviate the situation, NNPC is striving to boost output, and President Tinubu has issued an executive order to reduce production costs and increase revenue from oil and gas projects, potentially freeing up more funds from each barrel of oil. "Nigeria's $5bn Aramco loan stalled by oil price dip" was originally created and published by Offshore Technology, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Sign in to access your portfolio
