Marketers across Nigeria are intensifying engagement efforts with the refinery?s management to secure reliable and cost-effective fuel supplies as Dangote Petroleum Refinery prepares to commence the direct distribution of petrol to the domestic market on August 15.

The engagement, according to industry sources, is aimed at securing direct access to refined petrol at stable and competitive prices, amid ongoing fuel scarcity and volatile forex-driven import costs that have driven up production expenses across the country.

Industry players confirmed that both major and independent marketers have opened formal talks with Dangote Petroleum Refinery Ltd. ahead of the rollout.

Abubakar Shettima, president of the Independent Petroleum Marketers Association of Nigeria (IPMAN), told BusinessDay that most of the association?s members have already registered with the refinery to take advantage of the direct supply plan.

?Most of our members have registered with Dangote Refinery ahead of the August 15 takeoff,? Shettima said. ?Prices might drop due to the absence of logistics costs or petrol costs. It?s a good development, and we are positive about the implications for Nigeria?s economy.?

IPMAN, which has over 30,000 members and more than 150,000 service stations nationwide, is positioning itself to benefit from what could be a major shift in Nigeria?s fuel supply chain.

Data sourced from Dangote refinery showed the plant?s existing distribution network includes MRS, Heyden, Ardova (AP), Hyde, Optima, and Techno Oil.

Others are TotalEnergies, Garima Petroleum, Sunbeth Energies, Sobaz Nigeria Ltd., Virgin Forest Energy, Sixxco Oil Ltd., N.U. Synergy Ltd., and Soroman Nigeria Ltd. Others on the growing list are: Jezco Oil Nigeria Ltd., Jengre, Cocean, Kifayat, Triumph Golden, Sifem Global, Riquest, and Mamu Oil, among others.

Another senior oil executive told BusinessDay that Dangote refinery will leverage its relationship with some Major Energies Marketers Association of Nigeria (MEMAN), which collectively operates about 5,000 trucks as of 2025, to ensure that petrol, diesel, and aviation fuel reach every part of the country.

BusinessDay findings showed MEMAN?s members include 11 Plc with 352 trucks; Ardova Plc with 496 trucks; Conoil Plc with 349 trucks; MRS Oil with 305 trucks; NNPC with 3,153 trucks; and TotalEnergies with 647 trucks. According to a statement by the Dangote Group, firms such as Ardova Plc and MRS Oil already have bulk purchase agreements with the refinery.

Other multiple sources confirmed to BusinessDay that formal discussions are underway between major and independent marketers and Dangote Petroleum Refinery Ltd.

There are also other plans to ensure manufacturers, especially large-scale industrial users and logistics-intensive businesses, are adequately positioned to benefit from the refinery?s direct-to-market strategy.

?Manufacturers are keenly watching the August 15 date. We have initiated steps to engage with the Dangote Refinery to explore the possibility of direct supply agreements,? one manufacturer, who is also a senior official of Manufacturers? Association of Nigeria (MAN), told BusinessDay on condition of anonymity. ?Access to affordable and reliable fuel is vital for our operations, especially in a deregulated market where import price shocks are destabilising production budgets.?

Efforts to get Anthony Chiejina, Chief Corporate Communications Officer, Dangote Group, proved abortive as at the time of filling this report.

The Dangote Refinery, Africa?s largest with a capacity of 650,000 barrels per day, is expected to begin its delivery policy, which involves a fleet of 4,000 CNG-powered trucks delivering directly to petrol stations, industrial firms, and other large consumers.

This approach cuts out traditional depot owners, many of whom have long acted as intermediaries and handlers within the petroleum distribution chain. The policy also includes free delivery and generous credit facilities for large volume purchases, adding incentives for a more flexible and cost-effective delivery process.

While the move is expected to benefit marketers, rural filling stations, and large industrial users, it spells trouble for depot owners, import-dependent marketers, truckers, and petrol tanker operators.

Muda Yusuf, Chief Executive Officer (CEO) of the Centre for the Promotion of Private Enterprise (CPPE), said the proposition would benefit consumers who are outside Lagos and ?currently paying a premium for additional cost of transportation.?

?Incorporation of logistics into the internal supply chain framework minimizes the risk of business disruptions by unionized truck drivers, such as the tanker drivers? union. It is also good for better safety protocols in the transportation of petroleum products,? he said.

?There are serious safety concerns around the transportation of petroleum products, especially because the products are highly inflammable. Several petrol tanker accidents had resulted from various degrees of breach of safety protocols by tanker drivers.

?This negligence had led to horrific accidents resulting in the loss of several lives and the destruction of properties, often without any compensation.?

Winners, losers in this seismic shift:

Large industrial users

Manufacturers and other industrial players who rely heavily on diesel and petrol for operations are set to benefit from Dangote?s bulk supply model. By eliminating intermediaries, factories can secure fuel at lower costs, reducing operational expenses.

?Industries spend billions annually on diesel alone,? said Chinedu Okonkwo, an energy analyst. ?If Dangote can supply directly at better prices, it will ease production costs and potentially boost Nigeria?s manufacturing output.?

Independent marketers, rural filling stations

For years, independent petroleum marketers have struggled with supply bottlenecks, exorbitant depot charges, and erratic product availability. Dangote?s direct distribution model bypasses many of these hurdles, allowing marketers, especially those in underserved rural areas, to access products at competitive rates.

?This is a game-changer for us,? said Abubakar Shehu, an independent marketer in Kwara state. ?Before, we had to deal with multiple middlemen, delays, and high costs. Now, we can order directly from Dangote and get deliveries faster.?

Rural filling stations, often neglected by major distributors due to logistical challenges, stand to gain significantly. Dangote?s plan includes deploying smaller, more efficient trucks to reach remote locations, ensuring a steady supply and reducing fuel scarcity in these areas.

Consumers (potentially)

If the new distribution model succeeds in cutting out middlemen and reducing inefficiencies, consumers could see lower fuel prices in the long run. However, this depends on how much of the cost savings are passed down the supply chain.

THE LOSERS:

Depot owners

Perhaps, the biggest losers in Dangote?s new plan are petroleum depot owners. Traditionally, depots serve as critical storage and distribution hubs, charging fees for handling and reselling fuel. With Dangote supplying directly to retailers, many depots?especially those without strong logistics networks?face obsolescence.

?Depot owners who relied solely on storage fees are in trouble,? said an industry insider who requested anonymity. ?Dangote?s refinery has its own massive storage capacity, so why would marketers go through depots anymore??

Some depot operators may pivot into complementary services, but those unable to adapt risk shutting down.

Import-dependent marketers

Marketers who depend on imported petrol will struggle to compete with Dangote?s locally refined products. Nigeria has long relied on fuel imports due to dysfunctional refineries, but Dangote?s 650,000-barrel-per-day refinery is changing that.

?Importers will face higher costs due to forex fluctuations and international market volatility,? said Emeka Eze, an oil sector consultant. ?Dangote?s pricing will be hard to match, especially if the refinery achieves economies of scale.?

Dipo Oladehinde is a skilled energy analyst with experience across Nigeria's energy sector alongside relevant know-how about Nigeria?s macro economy. He provides a blend of market intelligence, financial analysis, industry insight, micro and macro-level analysis of a wide range of local and international issues as well as informed technical rudiments for policy-making and private directions. (BusinessDay)

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