Dangote Refinery Fuel Distribution Sparks Safety Fears and Monopoly Concerns

Nigeria’s downstream oil sector is on edge as Dangote Refinery officially kicks off nationwide fuel distribution with its new fleet of compressed natural gas (CNG) trucks.

The $20 billion refinery, located on the Lekki–Epe Expressway in Lagos, began rolling out trucks over the weekend, with hundreds already spotted on major highways. Dangote Group says it has committed N720 billion to acquire 4,000 CNG-powered trucks, although only about 1,000 are currently on the road.

The company insists the initiative will slash fuel distribution costs by N1.7 trillion annually and reduce pump prices. A new template released last week fixed the ex-depot price at N820 per litre, while retail prices are set to range between N841 and N851 per litre, depending on the state.

Industry divided over “game-changing” move

While the move has been described as transformative, it has also unsettled stakeholders.

The Nigeria Union of Petroleum and Natural Gas Workers (NUPENG), which has long accused Dangote of anti-labour practices, branded the scheme a “Greek gift.”

Similarly, the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) dismissed Dangote’s promise of free nationwide delivery as misleading.

But the Independent Petroleum Marketers Association of Nigeria (IPMAN) has welcomed the development, urging its members to key into the refinery’s distribution system.

Rising concern over Dangote truck accidents

The launch coincides with a worrying surge in Dangote truck-related accidents.

Recently, Ruth Otabor, sister of Big Brother Naija Season 7 winner Phyna, died in Auchi after being hit by one of the company’s trucks. Just days ago, a Dangote truck collided with a Benue Links passenger bus on the Lagos–Kogi expressway, leaving several injured.

“Dominance without checks is risky” – Expert warns

Professor Wumi Iledare, Emeritus Professor of Petroleum Economics, praised the refinery’s use of CNG trucks as innovative but cautioned against unchecked market dominance.

“Dangote’s move into CNG trucks is bold and could lower costs, cut emissions and deepen gas use. Vertical integration is not the issue — it’s common worldwide. The concern is dominance without checks. With Dangote already controlling refining, transport dominance risks stifling competition,” he told DAILY POST.

He added that safety concerns and the possibility of severe traffic disruptions must not be ignored.

“The way forward is clear: encourage innovation, but strengthen regulation, enforce safety, and protect fair competition. Only then can convenience outweigh the disruptions,” he said.