Less than a day before the planned rollout of Dangote’s groundbreaking fuel supply strategy, a potential crisis in Nigeria’s petroleum distribution network was averted.
When the Dangote Refinery announced in June that it would begin supplying refined petroleum products directly to filling stations, industrial plants, and other bulk fuel users, concerns quickly spread across the fuel marketing industry.
Many marketers and tanker drivers feared that bypassing the existing distribution system could trigger massive job losses and disrupt the national supply chain.
In a bid to resolve these concerns, the Dangote Group held a high-level meeting with key industry stakeholders, including the National Association of Road Transport Owners (NARTO) and the Natural Oil and Gas Suppliers Association of Nigeria (NOGASA).
Chinedu Ukadike, NOGASA’s National Publicity Secretary, told the PUNCH on Wednesday that both parties reached a mutual agreement.
According to him, the refinery assured marketers it would not sell directly to end users.
Instead, it will supply petroleum products in bulk to NOGASA members, who will then handle distribution to customers through established channels.
This move safeguards the roles of marketers and tanker drivers, easing fears of widespread job losses.
NARTO’s National President, Yusuf Othman, confirmed the arrangement, saying it would ensure a smoother integration of Dangote’s fuel distribution network without sidelining long-standing industry players.
“I want to say that Dangote heeded our plea by agreeing with us that they will be sending these products to the bulk buyers, who are the suppliers. Based on that, we don’t have issues again,” Ukadike said.
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He explained that NOGASA’s primary concern had always been protecting the supply chain they had heavily invested in.
“What we were saying ab initio was the issue of the supply chain in which we have invested so much. We requested that the supply chain be given to us in distribution, which I think Dangote has also complied with, since he is not going to supply directly to end users. We want to appreciate him for that,” he added.
Ukadike noted that members had initially panicked because they believed Dangote would sell directly to consumers.
“We are the bulk buyers; we buy in bulk, and we supply. Before, we were thinking that he was going to supply by retailing to the end users, the telecom masts, hotels, and the rest of them, but now he said no, that he is going to supply to the bulk buyers. This is giving us that power as suppliers to continue our jobs. We were afraid that if he sold fuel directly to end users, our labour capacity would be lost and our return on investment would be in jeopardy,” he said.
NOGASA members have already begun registering on the Dangote platform to buy refinery products in bulk.
Ukadike explained that bulk buyers will have fuel delivered by the refinery’s 4,000 CNG-powered trucks.
“Some of our members who are buying in bulk are now their companies in line with the guidelines they gave to us for registration, so that they can take these products and sell to end users. We were told that the 4,000 CNG-powered trucks will be delivering to bulk buyers. Once you pay, they deliver to you, not to end users,” he said.
Discussions about the effect of Dangote’s fuel distribution plan on tanker drivers are still ongoing, according to Othman.
“We are still consulting with our stakeholders. We met Dangote first, and we are going to meet him again,” he stated.
Industry watchers believe the agreement will not only protect thousands of jobs in Nigeria’s petroleum distribution sector but also improve efficiency, reduce costs, and promote the use of cleaner, CNG-powered vehicles.
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Image Credit: Daily Trust
