The launch of Dangote Refinery’s direct fuel distribution scheme is shaking up Nigeria’s downstream sector, with bulk fuel users and filling stations abandoning traditional middlemen to embrace Dangote’s free delivery service.
The President of the National Association of Road Transport Owners (NARTO), Yusuf Othman, disclosed this during a live appearance on TVC News. He criticised the free delivery system to filling stations, telecom firms, and other bulk buyers, warning that it threatens existing contracts between marketers and his members.
According to Othman, NARTO members own about 30,000 trucks dedicated to fuel distribution and cannot compete with Dangote’s offer of logistics-free delivery.
“We have our members who have signed agreements with so many companies. Some are even informal agreements, but we have formal agreements signed, and by that, we used those formal agreements to collect bank facilities to buy trucks and serve those companies. But now, those agreements are at stake because a big brother is coming to supply directly to them, not minding the fact that they have signed agreements with us,” he said.
He further explained that the survival of transporters is now under threat, as the new scheme leaves their trucks idle. “If I sign an agreement with you for service by virtue of my 10 trucks, and somebody somewhere comes to do the same thing for you for free, it’s a very delicate situation,” he added.
Othman appealed to the Federal Government and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to intervene, noting that Section 212 of the Petroleum Industry Act (PIA) prohibits such practices.
When contacted on Sunday, the NARTO boss declined further comments, hinting at an ongoing “ceasefire” and possible negotiations.
The Dangote Group rolled out the logistics-free delivery model last Monday, deploying over 1,000 compressed natural gas (CNG)-powered trucks across Lagos, Ogun, Ondo, Oyo, Osun, Ekiti, Edo, Delta, Rivers, Kwara, and Abuja.
As part of the initiative, fuel prices have been slashed. Retail stations in Lagos and other South-West states now sell at N841 per litre, while Abuja, Rivers, Delta, Edo, and Kwara retail at N851 per litre.
“The first phase of the deployment will cover the Federal Capital Territory, Lagos, Kwara, Delta, Edo, Rivers, and South-West states, with nationwide expansion planned as additional trucks are delivered,” the Dangote Group said in a statement.
Independent Petroleum Marketers Association of Nigeria (IPMAN) President, Abubakar Shettima, confirmed that marketers are already receiving Dangote’s CNG-powered trucks at no cost.
“Dangote has started the free delivery. Already, the trucks have started moving. In most parts of the Western Zone, they have already started discharging their products, since it is closer to Lagos. So the plan is moving seriously. And my marketers are very pleased with the development,” Shettima said, noting that pump prices are expected to drop from N865 to N841 once the new deliveries hit stations.
