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4,000 CNG Trucks: Tanker Drivers Panic as Dangote, Marketers Tighten Distribution Deal

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With less than 30 days to the commencement of the highly anticipated rollout of 4,000 Compressed Natural Gas trucks by the Dangote Refinery and Petrochemical Limited, industry stakeholders have signalled an alignment with the refinery’s plan to begin direct fuel distribution to marketers and critical sectors of the economy from August 15.

According to Sunday PUNCH checks revealed that as of Friday, no fewer than 25 marketers had signed up with the Dangote refinery for the direct fuel distribution deal.

The figure rose from an initial three, signalling increasing alignment between the indigenous refinery and oil marketers, it adds.

However, the development is fuelling concerns among tanker drivers, who fear massive job loss when Dangote begins direct supply of Premium Motor Spirit to the oil marketers.

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The refinery had last month announced its intention to supply PMS and diesel directly to petroleum marketers, retail dealers, manufacturers, as well as major players in the telecommunications and aviation industries, a move seen as a major disruption to Nigeria’s traditional fuel supply chain.

25 Strategic Partners

In what appears to be growing market confidence in the refinery’s logistics scheme, the number of strategic partners collaborating with Dangote for the fuel distribution initiative has now surged from three to 25, officials have confirmed.

A senior executive at Dangote Group, was cited by Sunday PUNCH revealed that marketers were registering ahead of the August launch, with the refinery preparing to move products nationwide using its fleet of 4,000 trucks.

“Yes, more marketers are now registering with us ahead of the planned free distribution of petroleum products using 4,000 trucks. Right now, the number of strategic partners has grown to 25. We started with three partners but now, it has jumped to 25 partners,” the Dangote official said.

The refinery had said the move is part of an effort to fill the gap created by Nigeria’s dependence on imports and to ensure the availability of refined products across the country.

Stakeholders say the free distribution scheme may significantly impact pump prices and ease logistics challenges, especially in northern Nigeria.

However, the refinery’s growing influence in the downstream sector has sparked debates around market dominance, regulation, and the long-term impact on local competition.

Marketers Left with no Choice

Giving the latest market reaction to the development, the National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria, Chinedu Ukadike, admitted that marketers were left with little choice but to align with Dangote.

“Well, we don’t have any option. Dangote has become the only supplier of petroleum products in Nigeria and West Africa. I don’t know if they have conquered other markets but I am talking authoritatively on information at my desk as the IPMAN spokesperson.

“We don’t have any other alternative and we are ready to partner. Most of us are ready to collaborate with Dangote. Marketers have applied to benefit from the free distribution scheme,” Ukadike told Sunday PUNCH.

According to him, the decision is driven by economic realities, especially the high cost of fuel, which has crippled the profitability of retail operations.

“Let me also state that whatever would bring petroleum price low at the dispensing point is the fulcrum of IPMAN members. Once the price is lower, the product will move faster, and there will be a gainful return on investment, but anytime you find that the product is high, contrary is the case.

“Sometimes, we don’t even finish one truck of petroleum product in a month and the running cost is accumulating. It is stagnant and can’t be waived. You can’t say that because you were unable to finish one truck in a month, the salaries of your workers won’t be paid. Nobody listens to that,” he explained.

Ukadike warned, however, that the current state of monopoly is unsustainable in the long term.

“We also charge other refineries to please come up, so that there can be competition, especially government-owned refineries. This will put a balance to the issue of monopoly.

“We simply don’t have any choice. But we won’t starve Nigerians. We are no longer importing, which means the refinery is supplying government too. So, we just have to build more refineries to ensure the price comes down.”

Tanker Drivers Panic

But while many independent marketers are embracing the refinery’s free distribution offer, there is growing panic over possible job losses among tanker drivers.

Sunday PUNCH’s interactions with the leadership of tanker drivers on Saturday revealed increasing concern about their future as more petroleum marketers align with Dangote’s plan to distribute fuel directly to filling stations and bulk consumers.

There are fears that the new arrangement could phase out tanker drivers and render their trucks redundant.

However, some of these drivers may eventually be absorbed into the Dangote workforce, Sunday PUNCH learnt.

As the Dangote refinery currently supplies a significant share of the fuel in circulation, most drivers presently lift products from its gantries. But with the planned deployment of Dangote-owned trucks, many fear that thousands of independent drivers may soon be out of work.

Although other depot owners and marketers still operate their own trucks, it is believed that many may opt for the free delivery option to cut logistics costs.

“Some of the marketers may need to park their trucks to enjoy free delivery,” an analyst noted.

Speaking with our correspondent on Saturday, the National President of the National Association of Road Transport Owners, Yusuf Othman, confirmed that stakeholders were planning to meet over the matter to make their positions known.

He, however, declined to disclose how the scheme would affect his members, saying consultations were ongoing.

“I am not going to say anything about it because we are in discussion,” Othman said.

Asked whether the discussions were with Dangote, he replied, “The discussion is with the stakeholders generally.”

In a similar vein, suppliers of petroleum products have also expressed concerns that if Dangote begins to sell petrol, diesel, and aviation fuel directly to bulk consumers such as filling stations, telecom firms, and industries, they and their drivers could lose their livelihoods.

Consequently, the Natural Oil and Gas Suppliers Association of Nigeria has scheduled a National Executive Council meeting to discuss the implications of Dangote’s distribution plan.

According to a notice issued by the association’s Secretary-General, Tunde David, the meeting, scheduled to hold in Abuja on July 31, followed due consultations with NOGASA’s National President, Benneth Korie.

It partly read, “Following due consultations with the National President, Mr Benneth Korie, DOI; notice is hereby given for the holding of the association’s NEC meeting on Thursday, 31st July, 2025, at Chida Hotel, Jabi, Abuja, by 10 a.m.”

PETROAN Urges Caution

Meanwhile, the Petroleum Products Retail Outlets Owners Association of Nigeria has warned against what it described as a “Greek gift” by Dangote.

The National President of PETROAN, Billy-Gillis Harry, drew parallels with past monopolies in Nigeria’s flour, sugar, and cement industries, warning that such distribution schemes may only offer temporary relief before ushering in higher prices.

He said, “I think Nigerians need to be careful about accepting a ‘Greek gift’. We need to be much more insightful, as we have experienced it in different spheres of the economy, whether it is flour, sugar, or cement.

“The methods have never been any different. So, if you go round the country, you would see containers of cement at selling points. But it did not at any time reduce the cost of cement.

“So, there is no anticipation that when everybody is drummed out of the business by these kinds of gifts, we wouldn’t get back to the same position where we would start looking to buy petroleum products for N2,500 per litre. It has happened in other areas. We are courageous enough to stand by our point.”

The 650,000-barrel-per-day refinery came on stream in January 2024, first rolling out diesel and aviation fuel A1.

PMS rollout followed nine months later, in September 2024.

As of February 2025, the refinery disclosed that it had reached 85 per cent of its installed capacity, expressing confidence in the speedy attainment of full capacity.

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Energy

FG Contemplates Direct Crude Supplies, Discounts to Refineries

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Nigeria Earns N12.4tn from Crude Oil in 11 Months – Report

In the bid to ease crude oil offtake by domestic refiners, address pricing and logistics challenges, the Nigerian government is taking a look at proposals for direct crude supplies and discounts to domestic refineries.

The Crude Oil Refinery-owners Association of Nigeria (CORAN), revealed that the proposals touch on allowing producers to deliver crude directly to nearby refineries and granting refiners a discount for transportation and handling costs embedded in the price of crude.

This was disclosed in a report by Reuters on Wednesday.

The report read, “The Federal Government is considering changes to crude allocation and pricing rules to improve feedstock access for its refiners, including Dangote Refinery.”

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The review comes as compliance with the domestic crude supply framework improved sharply in the second quarter of 2026, although refiners continue to complain that the cost and structure of domestic crude transactions make locally sourced feedstock expensive.

A spokesperson for CORAN, Eche Idoko, told Reuters that one of the proposals would enable producers, particularly those operating within international oil companies’ networks, to deliver crude directly to refineries located close to their production facilities.

Under the arrangement, the crude volumes could subsequently be reconciled at the relevant terminal, potentially reducing the need to transport the crude through longer trunkline routes.

Idoko said the proposal would bring crude closer to refineries while reducing some of the logistics costs associated with domestic supply. A second proposal would address the pricing component of domestic crude transactions.

Under the arrangement, refiners that lift crude directly from production facilities could receive a discount corresponding to freight and handling costs incorporated into the Brent-linked price of crude but which the refiners do not actually incur.

Idoko described the proposed arrangement as beneficial to both sides of the transaction. “Under one proposal, a producer linked to an IOC’s network could deliver crude directly to a nearby refinery, with volumes reconciled later at the terminal.

“This would reduce reliance on trunklines and bring crude closer to refiners. A second proposal would allow refiners that lift crude directly from production facilities to receive a discount reflecting the freight and handling costs embedded in Brent-linked pricing but not actually incurred by them. This could be a win-win for both the producers and refiners,” the report noted.

The proposed changes are coming against the backdrop of complaints by local refiners that the pricing structure for domestic crude makes their feedstock more expensive than necessary.

Recall that the Dangote Petroleum Refinery and Petrochemicals (DPRP) had estimated that Nigeria’s pricing structure could add between $3 and $4 per barrel to the cost of crude purchased by domestic refiners because transactions are often routed through trading arms of producers.

Energy analysts have similarly identified pricing, rather than the physical availability of crude, as one of the major challenges facing domestic refiners. The issue is particularly significant for the Dangote Refinery, Africa’s largest refinery, which has a nameplate capacity of 700,000 barrels per day.

Although the refinery has significantly increased its operations, securing adequate volumes of locally produced crude at competitive prices remains a key issue for the development of Nigeria’s refining industry.

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Energy

Nigeria Beats OPEC Quota for Third Month

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Nigeria’s crude oil production averaged 1.238m bpd in June – OPEC

Nigeria has met and exceeded its Organisation of Petroleum Exporting Countries (OPEC) quota of 1.5mbpd for the third consecutive month.

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) disclosed this in a statement on Tuesday.

The statement has it that in July 2026, Nigeria produced 1.505mbpd of crude oil and 0.17mbpd of condensate, making combined daily production to 1.67mbpd.

During the month under review, the daily peak production of crude oil and condensate was 1.78mbpd, while the lowest daily production was 1.57mbpd.

Although Nigeria met its OPEC quota in July, the statistics show that, on a month-on-month basis, production fell by 4 per cent.

READ ALSO: NNPC/Shell Vision First Initiative Impact over 10,000

The NUPRC attributed the decline in production to operational challenges at the Erha and Akpo fields, which affected output during the period under review.

These disruptions constrained production volumes and contributed significantly to the overall reduction in national crude oil output.

Despite the challenges, production operations across most other producing assets remained relatively stable, with operators implementing measures to maintain production efficiency and minimise the impact of operational constraints.

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Energy

Crude Supply to Local Refineries Rises 88.4% in Q2 — NUPRC

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Crude oil and condensate supply to local refineries rose by 88.4 percent to 53.7 million barrels in the second quarter of 2026, Q2’26, from 28.5 million barrels in the first quarter, Q1’26, the Nigerian Upstream Petroleum Regulatory Commission, NUPRC, has said.

The commission, in its Q2 2026 statistics on the enforcement of the Domestic Crude Supply Obligation, DCSO, said the 53.7 million barrels supplied to domestic refiners represented 97.4 percent performance during the quarter.

The DCSO is being enforced by the NUPRC pursuant to Section 109 of the Petroleum Industry Act, PIA, which provides for the supply of crude oil produced in Nigeria to domestic refineries.

According to the commission, the increase in crude supply coincided with higher domestic oil production and the execution of long-term crude supply agreements supported by bankable Sales and Purchase Agreements, SPAs, between producers and domestic refiners.

READ ALSO: Oil Prices Jump Further as Hopes for Hormuz Deal Fade

The NUPRC said it conducts monthly consultations with crude oil producers and licensed domestic refineries, following which specific volumes of crude oil and condensate are allocated to producers for supply to local refiners.

It, however, noted that the DCSO operates on a “willing buyer, willing seller” basis in accordance with the PIA, which affects the volumes eventually supplied and accepted.

In April, the NUPRC allocated 18.13 million barrels to producers, while producers offered 19.31 million barrels to domestic refiners. Actual supply stood at 20.88 million barrels, representing 114.9 percent performance against the allocation.

In May, the commission allocated 18.78 million barrels, while producers offered 23.19 million barrels to local refiners. Actual supply fell to 14.23 million barrels, representing 75.8 percent compliance.

Supply increased in June, with the NUPRC allocating 18.17 million barrels to producers, while producers offered 26.84 million barrels to refiners. Actual supply stood at 18.61 million barrels, representing 102.4 percent performance.

The commission said the figures showed that the DCSO was being actively administered and enforced, adding that the improvement was supported by increased crude production and stronger commercial arrangements between producers and refiners.

At the refinery level, the NUPRC said Dangote Refinery required 63 million barrels of crude in Q2, while producers offered 68.1 million barrels.

The 68.1 million barrels offered represented 98 percent of the total crude volumes offered by producers during the quarter.

However, the refinery accepted 52.6 million barrels, representing 78 percent of the volume offered to it.

The NUPRC said it remained committed to supporting the Federal Government’s objective of achieving energy sufficiency by leveraging the PIA to sustain the growth in crude oil production and continuously enforce the DCSO.

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