This marks a significant shift in Nigeria’s downstream logistics, aimed at improving distribution efficiency and cutting transportation costs.
According to the company, the new CNG fleet—acquired through Dangote Petroleum Refinery and Petrochemicals—will be deployed starting August 15, 2025.
In a statement quoted by The Punch, the company said the move was designed to meet Nigeria’s daily consumption of 65 million litres of refined products. “This includes 45 million litres of Premium Motor Spirit, 15 million litres of diesel, and 5 million litres of aviation fuel,” it stated.
“With the average logistics cost estimated at N45 per litre, the refinery will cover over N1.07tn annually in free distribution expenses. Dangote Group is investing N720bn in the acquisition of 4,000 CNG-powered trucks as well as the establishment of nationwide CNG ‘mother and daughter’ stations, among other infrastructure to implement the free distribution initiative,” the statement added.
The decision forms part of a broader strategy to adopt cleaner energy sources while bypassing third-party marketers and eliminating the bottlenecks that have historically plagued fuel delivery in Nigeria.
Dangote’s foray into petroleum distribution
With operations set to begin in phases, industry stakeholders are closely monitoring what could become a transformative moment in Nigeria’s petroleum sector, particularly as the Dangote Refinery ventures into the distribution of diesel, petrol, and aviation fuel.
This area was previously the exclusive domain of established petroleum marketers.
In an earlier report, Business Insider Africa analyzed Dangote’s entry into the product distribution chain and how it would benefit the refinery’s broader operations.
Dangote’s refinery is currently running at about 85% of its 650,000 barrels-per-day capacity, making it one of the world’s largest single-train facilities—a scale that significantly reduces the cost per barrel.
With the rollout of 4,000 CNG-powered trucks, which are around 40% cheaper to operate than diesel-powered tankers, logistics costs are expected to drop sharply. This combination effectively eliminates much of the traditional supply chain markup embedded in pump prices.
In Nigeria’s deregulated downstream sector, where prices are shaped by global oil markets, exchange rates, and transport costs, Dangote’s full control from refining to delivery could enable significant savings for consumers and bulk buyers.
The return to direct deliveries is expected to boost supply reliability and reflects the company’s commitment to cleaner, more efficient logistics in line with Nigeria’s energy transition goals.
The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has voiced strong concerns that Dangote’s direct delivery model could “wipe out” smaller operators who rely on older, less efficient supply systems.
Industry critics warn that the move could lead to widespread job losses, further market consolidation, and a long-term erosion of competition within the sector.
