Oil Suppliers Threaten Action as Dangote Refinery Plans Direct Sales to End Users

The Natural Oil and Gas Suppliers Association of Nigeria (NOGASA) has expressed strong opposition to Dangote Refinery’s newly disclosed plan to supply petroleum products directly to end users, warning of industry-wide disruption and job losses.

According to the association, Dangote Refinery’s proposed strategy of deploying 4,000 Compressed Natural Gas (CNG)-powered tankers to deliver Premium Motor Spirit (PMS) and diesel directly to corporate consumers—such as telecom firms, manufacturers, aviation companies and large-scale retailers—bypasses existing distribution channels and threatens to render thousands of intermediaries redundant.

Benneth Korie, President of NOGASA, issued a statement on Monday cautioning that the development could destabilize the current supply chain structure and create economic dislocation across the downstream segment of Nigeria’s petroleum sector.

“This is the new trend in the oil and gas industry, where Dangote is now supplying products directly to end users. Members of NOGASA are suppliers of petroleum products. By so doing, a lot of jobs are at stake and we are kicking against this new way of supplying products,” Korie said.

The association noted that the move undermines the operational role of suppliers who currently serve as the logistical bridge between refineries and retail consumers.

Korie stressed that the plan will displace trucks, drivers, depot managers, and other key logistics personnel, compounding unemployment and weakening the industry’s support ecosystem.

“This approach will remove jobs from a lot of our members and make some of our staff redundant. Some of our trucks will no longer be operational,” he added.

In response, NOGASA has scheduled a general meeting for July 31 at Chida Hotels, Abuja, to deliberate on a collective position, including the possibility of a service withdrawal and formal engagement with Dangote Refinery.

Korie disclosed that the association aims to negotiate a framework where Dangote supplies petroleum products to NOGASA members, who will in turn deliver to end users under a maintained distribution hierarchy.

“We are meeting to decide whether to down tools and to ensure that Dangote deals directly with us. This is about protecting the integrity of the supply chain,” he stated.

The association argues that bypassing the traditional supply structure could introduce volatility and imbalance to an already fragile market. NOGASA insists that existing distribution systems help maintain industry order, pricing consistency, and job stability, which must be preserved.

Meanwhile, stakeholders in the oil and gas sector are monitoring the development, with many concerned about potential market fragmentation and increased friction between large-scale refineries and midstream operators.

Dangote Refinery, which commenced phased operations earlier this year, has yet to issue a response to NOGASA’s statement.

However, industry analysts expect the company to continue pursuing vertical integration strategies aimed at maximizing efficiency and profitability.

With NOGASA threatening to escalate the matter, regulatory authorities may be drawn in to mediate the emerging dispute. The outcome could shape the future of product distribution models in Nigeria’s evolving downstream oil sector.