Dangote Petroleum Refinery has revealed that its N720 billion investment in its landmark nationwide petroleum products distribution initiative will save Nigerians over N1.7 trillion annually.
This disclosure is contained in a statement issued by the Dangote Group on Sunday, June 30, 2025, where it provided an update on the refinery’s investment in 4,000 Compressed Natural Gas (CNG) powered trucks for the scheme.
Dangote refinery, in its statement, pointed out that the energy firm will absorb over N1.07 trillion annually in fuel distribution costs.
It stated that this initiative, which eliminates transportation costs for fuel marketers and large-scale consumers, is expected to help reduce pump prices and inflation.
42 million MSMEs to benefit
The refinery stated that the initiative is also poised to significantly benefit over 42 million Micro, Small and Medium Enterprises (MSMEs) by reducing energy costs and enhancing profitability.
The statement reads, ‘’Dangote Petroleum Refinery has invested over N720 billion to implement its landmark initiative of deploying 4,000 Compressed Natural Gas (CNG)-powered trucks for the nationwide distribution of petroleum products, which is expected to save Nigerians over N1.7 trillion annually.
‘’This bold step will see the privately-owned refinery absorb over N1.07 trillion annually in fuel distribution costs. The initiative is also poised to significantly benefit over 42 million Micro, Small and Medium Enterprises (MSMEs) by reducing energy costs and enhancing profitability.
‘’The initiative, which eliminates transportation costs for fuel marketers and large-scale consumers, is expected to help reduce pump prices and inflation. From 15 August, Dangote will begin the direct delivery of petrol and diesel to filling stations, industrial facilities, and other high-volume consumers.’’
According to a statement from the refinery, it aims to meet Nigeria’s daily consumption of 65 million litres of refined petroleum products. This includes 45 million litres of Premium Motor Spirit (PMS), 15 million litres of diesel, and 5 million litres of aviation fuel.
With the average logistics cost estimated at N45 per litre, the refinery will cover over N1.07 trillion annually in free distribution expenses.
Presidency, experts praise scheme
Dangote Group, in its statement, said the presidency commended the scheme, describing the initiative as a pivotal moment in the Federal Government’s push to mainstream gas-powered transportation.
The company said the Commercial Coordinator of the Presidential Compressed Natural Gas Initiative (PCNGI), Tosin Coker, praised the move as a strong vote of confidence in Nigeria’s gas-fueled future.
He was quoted as saying, “Dangote Group’s acquisition of 4,000 CNG trucks is not only impressive in scale but also highly strategic,” he said. “It signals to the market that CNG is no longer a distant prospect but a current, practical solution to high energy costs, emissions, and supply chain challenges. PCNGI regards this as a milestone achievement in our efforts to accelerate gas-powered transport adoption.”
According to the company, the Independent Petroleum Marketers Association of Nigeria (IPMAN) also commended the development, calling it a timely resolution to longstanding challenges in the downstream sector.
IPMAN’s National Publicity Secretary, Chinedu Ukadike, stated that the new model would significantly reduce logistical burdens for independent marketers by delivering more affordable fuel directly to filling stations.
Ukadike said, “Our pipelines have been non-functional for years, yet nothing has been done to revive the infrastructure linking the country’s 21 depots. We’ve had to rely on expensive transport from coastal depots. Dangote’s intervention lifts a huge burden off the shoulders of independent marketers.”
Development Economist and Policy Analyst, Professor Ken Ife, said the initiative would drive down the price of PMS and yield widespread benefits for Nigerians.
Also, quoted in the statement, the CEO of Financial Derivatives Company, Bismarck Rewane, dismissed concerns about the refinery becoming a monopoly, arguing that inefficiencies in the sector have been systemic and long-standing. He added that the scheme would help curb the parasitic role traditionally played by middlemen.
Rewane said, “What Dangote is doing achieves two key objectives: delivering products across the entire country at a uniform price by eliminating bridging costs, and significantly reducing logistics expenses through the use of CNG-powered trucks to reach every corner of the nation.
“In economic terms, middlemen who typically do not invest are often viewed as parasitic, extracting margins simply for distributing goods. Dangote is bypassing this layer by directly handling distribution and, notably, providing credit facilities to the retail end of the business.’’
What you should know
Dangote Petroleum Refinery had on June 15, 2025, announced plans to begin the nationwide distribution of PMS and diesel starting August 15, 2025, marking a significant step towards reshaping Nigeria’s downstream petroleum market.
- As part of the initiative, the company has also deployed 4,000 brand-new Compressed Natural Gas (CNG)-powered trucks to support nationwide distribution, with free logistics support will be provided to registered petrol dealers, marketers, manufacturers, telecom firms, aviation operators, and other consumers.
- Dangote Group is investing N720 billion in the acquisition of these trucks as well as the establishment of nationwide CNG ‘mother and daughter’ stations, among other infrastructure to implement the free distribution initiative.
- This strategic programme forms part of Dangote’s broader commitment to eliminating logistics bottlenecks, enhancing energy efficiency, promoting environmental sustainability, and supporting Nigeria’s economic development.
- The company noted that lower fuel distribution costs will help reduce production costs, ease inflationary pressures, and stimulate economic growth.
The initiative is also expected to resuscitate dormant filling stations, fostering job creation in the process. Over 15,000 direct jobs are projected to be created across the logistics chain, including drivers, station managers, and attendants at the CNG stations.
The refinery also emphasised that this programme would help curb cross-border smuggling of petroleum products and support a more efficient and environmentally friendly distribution system.
