NIGERIA’s downstream petroleum sector is poised for a dramatic shake-up as Dangote Petroleum Refinery announces the commencement of direct distribution of Premium Motor Spirit (PMS) and diesel across the country.
The new initiative, effective from August 15, 2025, is set to disrupt traditional supply chains and poses serious implications for private depot owners and intermediaries.
On Sunday, Dangote Refinery announced it has deployed 4,000 brand-new Compressed Natural Gas (CNG)-powered tankers to ensure nationwide delivery of petroleum products.
The above development, according to industry experts, will not only disrupt existing supply chains but also address two chronic issues in Nigeria’s downstream sector: frequent fuel tanker accidents and perennial strike threats by petroleum tanker drivers.
With this, the refinery will bypass depots and deliver directly to petrol stations, manufacturers, aviation companies, telecom firms, and other bulk fuel users, offering free logistics as an incentive.
“Our goal is to provide equitable access to affordable fuel for all Nigerians, regardless of location, making energy more accessible and sustainable for everyone, wherever they may be,” Dangote said in a statement seen by BusinessDay.
This strategy not only reduces operational costs for retailers but also threatens to marginalise existing depot owners, many of whom have profited for decades as middlemen in the petrol supply chain.
With free delivery and potential credit facilities, Dangote’s model represents a direct challenge to the traditional logistics-dependent structure of fuel distribution in Nigeria.
Depot owners, already grappling with operational costs and reduced margins, now face further pressure.
“This development could severely undercut our market relevance,” lamented a depot operator in Apapa who spoke anonymously. “If marketers can now source fuel directly at competitive rates and get free transportation, we’re left with little value proposition.”
Historically, depot owners have served as intermediaries between importers or refineries and retail stations, often charging significant premiums for storage and distribution.
However, Dangote’s model, powered by an integrated supply chain and large-scale infrastructure investment, reduces reliance on third-party services.
“This is the Uber moment for the Nigerian fuel sector,” a senior oil executive told BusinessDay. “With 4,000 CNG tankers, the refinery can deliver directly to any station nationwide. This removes the need for depot owners unless they can offer something dramatically better or cheaper.”
In a country where logistics often account for a significant portion of fuel cost, Dangote’s free delivery policy may become a game-changer.
For petrol marketers, the opportunity to reduce delivery expenses while gaining access to a stable supply is a welcome relief, especially amid recent volatility in global oil markets.
A Boost for rural petrol stations.