The recent plan by Dangote Refinery to supply petroleum products directly to end users bypassing the traditional distribution chain is constituting a threat to other industry stakeholders, the Natural Oil & Gas Suppliers Association of Nigeria (NOGASA) has said.
Although consumers hail the decision by Dangote as a welcome development, as it would remove the activities of third parties that help drive up the final retail pump price, NOGASA raised strong objections to the arrangement, claiming it could lead to loss of jobs by some of its members.
NOGASA’s president, Benneth Korie, expressed the concern of the association on Monday, saying the move could significantly disrupt the oil and gas industry, putting thousands of jobs at risk and jeopardising the existing business models of suppliers nationwide.
Recently, Dangote Refinery announced plans to begin direct supply of petroleum products to end users effective August 15, 2025.
On June 15, 2025, the refinery management unveiled a fresh strategy to boost effective distribution of its products in a bid to crash the retail price of fuel among consumers.
As part of the strategy, the refinery said it would deploy about 4,000 new Compressed Natural Gas (CNG)-powered tankers for nationwide distribution of Premium Motor Spirit (PMS) and diesel directly to marketers, petrol dealers, manufacturers, telecom firms, aviation companies, and other large consumers, bypassing traditional depots and intermediaries.
However, Korie said Dangote’s decision to supply products directly to large organizations, such as telecommunications giants and hotels, marks a notable shift in the sector.
He said members of NOGASA, who serve as intermediaries between refineries and final consumers are afraid this new distribution model by Dangote would render their roles obsolete.
“This is the new trend in the oil and gas industry, where Dangote is now supplying products directly to end users, especially MTN, companies, hotels, and all the rest of them. Members of NOGASA are suppliers of petroleum products. By doing so, a lot of jobs would be at stake and we are kicking against this new way of supplying products to end users,” Korie stated.
Elaborating on the potential consequences of the new arrangement, Korie said many NOGASA members and their employees could be rendered redundant and thrown out of work.
“The redundancy of trucks, drivers, and other logistical staff looms as a direct result of the bypassed supply chain,” he said.
The association said if allowed to stand, the new distribution arrangement would have a ripple effect not just on the livelihoods of their members, but also on the Nigerian economy in general.
“It will remove jobs from a lot of them and some of our staff and trucks will be redundant,” Korie noted.
He said NOGASA has scheduled a general meeting in Abuja on July 31 to discuss the development, to work out a unified strategy to address the issue.
“The association is seeking to advocate for a distribution structure where Dangote supplies products to NOGASA members, who will then sell to the end users, preserving jobs within the supply chain.
“Bypassing the traditional distribution mechanism is not healthy for the oil and gas industry. It poses risks to its stability. The association is calling on all stakeholders to recognize the vital role that suppliers play—not only in logistics, but also in maintaining a balanced industry ecosystem,” Korie said.
