The Nigerian petroleum product distribution landscape is on the brink of a monumental shift, causing palpable panic among traditional diesel-powered tanker drivers. This comes as the Dangote Petroleum Refinery prepares to launch a massive fleet of 4,000 Compressed Natural Gas (CNG) powered trucks, alongside a direct distribution deal with marketers nationwide, set to commence on August 15, 2025.

The move, spearheaded by Africa’s richest man, Aliko Dangote, represents a staggering N720 billion investment aimed at streamlining fuel logistics, cutting costs, and enhancing product accessibility across Nigeria. According to statements from the Dangote Group, this initiative is poised to absorb over N1.07 trillion annually in fuel distribution expenses, effectively offering free logistics to fuel marketers, petrol station dealers, manufacturers, telecom operators, and other high-volume consumers.

While hailed by many as a revolutionary step to stabilize pump prices and reduce inflation – with an estimated annual saving of N1.7 trillion for Nigerians – the strategic pivot has sent jitters through the ranks of independent tanker drivers and owners. The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has already issued a warning that this direct distribution model could potentially force over 2,000 independent fuel stations out of business and trigger widespread job losses across the traditional petroleum distribution chain.

“This is a threat to thousands of small and independent marketers who have been the backbone of Nigeria’s fuel retail sector,” PETROAN stated, urging government regulators to intervene to prevent smaller players from being squeezed out. Abdullahi Bello, head of a tanker drivers’ association in Apapa, Lagos, voiced concerns for his members’ livelihoods, acknowledging, “Many tanker drivers could lose business if Dangote uses its own fleet or contracts to select logistics providers.”

The strategic choice of CNG-powered trucks underscores a commitment to both cost-effectiveness and environmental sustainability. CNG is significantly cheaper and cleaner than traditional diesel, leading to substantial reductions in operational expenses and greenhouse gas emissions. This aligns with Nigeria’s broader energy transition plan championed by the Presidential Compressed Natural Gas Initiative (PCNGI).

Dangote’s direct distribution plan will cover Nigeria’s daily consumption needs, including 45 million litres of Premium Motor Spirit (PMS), 15 million litres of diesel, and 5 million litres of aviation fuel. To support this massive undertaking, the refinery is also establishing over 100 CNG “mother and daughter” stations across the country, alongside an additional fleet of over 100 smaller CNG tankers to ensure seamless last-mile delivery.

Beyond cost savings, the initiative aims to revive dormant filling stations, support Micro, Small, and Medium Enterprises (MSMEs) by reducing their energy costs, and potentially create over 15,000 direct jobs in the new logistics chain, including drivers, station managers, and attendants at the CNG stations. The company is also offering a credit facility for bulk buyers purchasing a minimum of 500,000 litres, with an additional 500,000 litres available on credit for two weeks, subject to a bank guarantee.

The move is seen by industry experts as a bold attempt by Dangote to circumvent existing middlemen and tackle the systemic inefficiencies and high logistics costs that have long plagued Nigeria’s downstream sector. While supporters argue this is merely deregulation at play, ensuring greater efficiency, those in the traditional haulage business fear a monopolistic dominance that could fundamentally alter their operations and existence.

As the August 15 rollout date approaches, all eyes will be on how this transformative initiative impacts fuel prices at the pump, job security in the transport sector, and the overall landscape of Nigeria’s energy distribution.