The ongoing standoff between Dangote Petroleum Refinery, the Nigerian Union of Petroleum and Natural Gas Workers (NUPENG), and the Depot and Petroleum Products Association of Nigeria (DAPPMAN) has raised concern among stakeholders in Nigeria’s petroleum sector.
The stakes for Nigeria’s downstream
Nigeria’s downstream petroleum sector is the lifeblood of its energy economy. It comprises refining, transportation, storage, and retail of petroleum products, activities that directly affect everything from the cost of transportation to electricity generation and food prices.
For decades, the sector has struggled with inefficiencies: ageing depots, chronic import dependence, infrastructure decay, and corruption. The launch of the 650,000-barrels-per-day Dangote Refinery was widely celebrated as a potential game-changer, a project capable of saving Nigeria billions in foreign exchange, creating jobs, and ending the country’s reliance on imported petrol.
Read also:Dangote refinery halts self-collection of petroleum products
But with such dominance comes new fears. Existing operators, represented by DAPPMAN, PETROAN, NARTO, and NUPENG, argue that Dangote’s entry into distribution could cripple smaller players who have kept the system afloat for years.
Yusuf Lawal Othman, President of NARTO, warned that “a huge number of jobs and investments is about to be eroded” if Dangote’s trucks take over fuel distribution. Similarly, Billy Gillis Harris, PETROAN President, stressed that “you cannot be a refiner and at the same time be a transporter and retailer,” citing PIA provisions against vertical monopoly.
For Tunji Oyebanji, managing director of 11 Plc, formerly Mobil Oil, “Invoking relevant sections of the law could further prevent an escalation of the crisis”.
In an interview, he reminded both the industry and the authorities that one of the cardinal aims of the Federal Competition and Consumer Protection Council (FCCPC) is to prevent anti-competitive practices.
He added, “It’s like having a referee who has failed to step in when there is a breach of rules but rather decides to look the other way when a party or either parties have called out of line or aren’t playing according to the rules. The referee at that point must step in to enforce the rules.”
The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), established precisely to police this sector, finds itself under increasing pressure to wield “the big stick” before matters spiral out of control.
For the Petroleum Products Retail Owners Association of Nigeria (PETROAN), the crisis is about fairness and respect for boundaries. Its president, Billy Gillis Harris, is adamant that the industry cannot function if one player is allowed to straddle every segment of the value chain.
To him, the best way forward is dialogue anchored in law. “Our take is for Dangote and all other market players to calm down and come to a round table to resolve all issues at stake so that the business can be done in a way that it would benefit all Nigerians.”
The alarm bells are even louder from the transport end of the chain. Yusuf Othman, president of the Nigerian Association of Road Transport Owners (NARTO), has accused Dangote Refinery of venturing into areas explicitly off-limits under the Petroleum Industry Act (PIA).
According to him, while the refinery is licensed to operate in the midstream sector, the decision to acquire about 4,000 trucks for the distribution of petroleum products amounts to an incursion into the downstream segment.
“This is a violation of the PIA and shouldn’t be encouraged,” Othman declared, warning that jobs and investments were on the line. He cautioned that such vertical integration could render existing depots across the country redundant and throw countless workers into uncertainty. Beyond private operators, he reminded the government that its own assets and workers in NNPC Retail Limited were equally at risk.
“Foreign investors with trucks operating in the downstream sector must equally be protected,” he added, suggesting that without careful regulatory oversight, Nigeria could scare off the very partners it needs to modernise the industry.
Read also: Nigeria leads African countries to sign petroleum regulatory charter
Dangote’s defence
Dangote Industries, however, has consistently defended its business model. In recent months, Dangote has successfully exported refined petroleum products to the United States and Europe, showing that its operations meet international standards.
According to Olufemi Adewole, DAPPMAN’s executive secretary, this proves that the refinery’s efficiency is world-class.
But he added that if foreign markets allow imports to encourage competition, Nigeria, too, must ensure that its market remains open and not tilted towards a monopoly.
Dangote’s camp argues that its trucks are not intended to monopolise distribution but to ensure reliability in a country where infrastructure failures, vandalism, and logistical bottlenecks often disrupt supply.
For instance, with frequent strikes by transport owners, pipeline vandalism, and depot inefficiencies, Dangote insists that self-reliance in logistics is necessary to guarantee uninterrupted supply to Nigerians.
In essence, the company believes it is filling a vacuum that regulators and other players have failed to address.
Joint-Technical Working Committee
The NMDPRA and FCCPC last week inaugurated a 10-member Joint-Technical Working Committee to strengthen consumer protection in the energy sector. The move was presented as a direct response to recurring complaints about anti-competitive practices and poor service delivery.
Ogbugo Ukoha, executive director of distribution systems, storage and retailing infrastructure, who represented NMDPRA’s Chief Executive, Farouk Ahmed, at the inauguration in Abuja, explained that the committee would monitor and investigate market practices with an eye on consumer rights.
Co-chaired by Omagu Nwachukwu of the FCCPC and Charles Nwachukwu of the NMDPRA’s Alternative Dispute Resolution Centre, the body has been tasked with identifying threats to the sector and escalating them to senior management for action.
