Nigeria’s Dangote refinery to supply fuel directly, challenging local traders

June 16, 2025

The Dangote Oil Refinery will in August begin directly begin supplying fuel to retail stations, manufacturers, telecoms firms, and other large users, a move that could enhance supply but puts it in direct competition with local fuel traders.

Africa’s biggest refinery with 650,000 bpd capacity began processing gasoline for the local market last year and has allowed local fuel traders lift products from its refinery. Now it seeks to take on distribution.

To facilitate the undertaking, the refinery said in a statement on Sunday that it had procured 4,000 new Compressed Natural Gas (CNG)-powered trucks, and will build over 100 CNG refuelling stations across the country.

The refinery said it will also offer a credit facility, allowing purchases of 500,000 liters to access an additional 500,000 liters on credit for two weeks under bank guarantee.

Dangote’s planned deployment of 4,000 trucks is more than double the number of trucks currently in operation and this is unsettling local fuel traders. “In one fell swoop, he’s trying to wipe us out,” said Billy Gillis Harry, head of Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN).

The group comprising over 6,700 members said introducing cheaper CNG trucks poses a threat to the livelihood of truckers and will erode the businesses of traders supplying the telecom companies, retail stations and industries.

REUTERS