Dangote Petroleum Refinery’s new fuel distribution initiative targeting marketers, fuel station operators, manufacturers, telecoms firms, the aviation sector and other high-volume users has been lauded by analysts who say the move could significantly reduce inflation, create thousands of jobs, and break the long-standing grip of middlemen on Nigeria’s petroleum supply chain.

A major highlight of the initiative is the deployment of 4,000 Compressed Natural Gas (CNG)-powered trucks, with free logistics support. Experts say the scheme could reduce intermediaries’ grip on the petroleum distribution chain and promote environmental sustainability. Crucially, the refinery will provide free logistics support across the country, a move experts say could help stabilize pump prices and improve access in underserved areas.

A university lecturer and public affairs analyst, Dr Abimbola Oyarinu, said if properly executed, the plan would reduce the influence of middlemen who have historically disrupted the oil and gas sector. He observed that these intermediaries, including tanker drivers, have historically held the sector, and sometimes even the state, to ransom.

“This initiative has the potential to dismantle the dominance of powerful middlemen, who have in the past stalled progress and held entities like the NNPCL hostage. However, Nigerians will judge it by its impact on fuel prices. If it leads to cheaper petrol at the pump, it will ease inflation considering fuel costs and exchange rates are key inflationary drivers in Nigeria,” Dr Oyarinu said.

Energy analyst, Ibukun Phillips described the scheme as “revolutionary”, noting its potential to improve fuel accessibility and affordability, especially for rural communities.

“Logistics currently account for between 10 per cent and 30 per cent of fuel prices. Eliminating this cost will naturally reduce pump prices. Rural dwellers often pay more for fuel than those in urban areas, despite earning less. This initiative could revive disused filling stations and ensure more equitable distribution.”

Philips added that the initiative would also create employment opportunities, with no fewer than 8,000 drivers expected to be hired to commence operations.

Speaking on a national television programme, energy expert and co-founder of Dairy Hills, Kelvin Emmanuel, said Dangote’s decision to shoulder logistics costs marks a critical shift that could finally allow Nigerians to enjoy the full benefits of domestic refining. He argued that concerns about the refinery becoming a monopoly were misplaced, pointing instead to systemic inefficiencies that have plagued the sector for decades.

“People have valid concerns, but let’s be clear: the real business marketers have been involved in isn’t selling PMS with margins of N5 to N15. Their real gains have come from exploiting arbitrage opportunities, often with substandard imports that don’t meet the sulphur specifications outlined in the Petroleum Industry Act (PIA).”

Citing structural gaps and regulatory failings, he noted: “For instance, I can confirm that the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) currently owes independent marketers N1.8 billion in outstanding bridging claims. Whether these claims are valid is another matter, an independent forensic audit would be required to determine that.”

According to him, the refinery is stepping in to address long-standing critical gaps in Nigeria’s downstream fuel distribution chain.

He emphasised that fuel supply across the country remains inconsistent, with only Lagos, a few states in the southwest, and Abuja enjoying relatively stable and fair pump prices.

“Dangote is taking on the burden of transportation, storage, and bridging costs that should have been streamlined long ago. This is in response to the resistance from vested interests who have tried to frustrate fair and efficient distribution,” he said.

Emmanuel further stated that the refinery’s current reliance on road transport is a strategic move to bypass longstanding infrastructural and bureaucratic challenges.

“The immediate fix is the deployment of CNG-powered trucks to ensure last-mile delivery while avoiding delays caused by existing structural inefficiencies,” he added.