In what experts have described as a transformative milestone in Nigeria’s energy and economic landscape, Dangote Petroleum Refinery has announced a N720 billion investment in the deployment of 4,000 Compressed Natural Gas (CNG)-powered trucks to facilitate free, nationwide distribution of petroleum products.
The initiative is projected to save Nigerians over N1.7 trillion annually.
The bold move, which will commence officially on August 15, 2025, will see the refinery absorb logistics costs for transporting petrol, diesel, and aviation fuel directly to filling stations, industrial hubs, and high-volume consumers across the country.
This marks a historic shift away from Nigeria’s long-standing reliance on inefficient and costly fuel supply chains. According to a statement from the company, the refinery plans to meet the country’s daily demand of 65 million litres of refined petroleum products, comprising 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 per litre estimated at N45, the Dangote Group’s investment means the company will incur over N1.07 trillion in annual distribution expenses on behalf of fuel marketers and end users.
This elimination of logistics costs is expected to lead to a drop in pump prices, lower production costs, and reduced inflation across key sectors of the economy.
In addition to the fleet of trucks, the initiative includes the development of nationwide CNG infrastructure, including “mother and daughter stations to ensure efficient and environmentally friendly refuelling networks.
The refinery noted that over 42 million Micro, Small, and Medium Enterprises (MSMEs) stand to benefit directly from the programme through reduced energy costs, improved profitability, and more reliable fuel delivery systems.
Beyond logistics cost savings, the initiative is positioned to significantly impact Nigeria’s macroeconomic stability.
Analysts say the reduction in transport and energy input costs could help slow inflation, which has been exacerbated by high energy prices and foreign exchange volatility.
The rollout will also revive dormant filling stations and stimulate economic activities in underserved communities.
As part of the programme’s implementation, over 15,000 direct jobs are expected to be created across the logistics chain, from truck drivers to station managers and maintenance personnel at the new CNG facilities.
According to the company, this intervention will not only decentralise fuel access, especially in rural areas, but will also curb fuel smuggling across Nigeria’s porous borders.
The Presidency has hailed Dangote’s initiative as a major breakthrough in the administration’s drive to promote gas-powered transportation.
Tosin Coker, Commercial Coordinator of the Presidential Compressed Natural Gas Initiative (PCNGI), said: “Dangote Group’s acquisition of 4,000 CNG trucks is not only impressive in scale but also highly strategic.
“It signals to the market that CNG is no longer a distant alternative but a present, viable solution to high energy costs and emissions.”
The Independent Petroleum Marketers Association of Nigeria (IPMAN) also commended the move, noting that it addresses long-standing distribution challenges in the downstream oil sector.
“Our pipelines have been non-functional for years. Independent marketers have had to rely on expensive trucking from coastal depots. Dangote’s intervention is lifting a huge weight off our shoulders,” said Chinedu Ukadike, IPMAN’s National Publicity Secretary.
Development Economist and Policy Analyst, Professor Ken Ife, described the initiative as one that will drive down the cost of PMS and bring about broad economic benefits.
Similarly, Bismarck Rewane, CEO of Financial Derivatives Company, dismissed concerns about potential market monopoly, stressing that the refinery is providing a service the government and other players have long failed to deliver efficiently.
“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,” Rewane said.
He added that Dangote’s decision to bypass traditional middlemen by handling distribution directly not only enhances efficiency but also promotes price transparency in the market.
“Middlemen, who typically don’t invest but extract margins, have historically distorted the market. Dangote is disrupting that layer by providing end-to-end delivery, with additional credit support to retail operators,” Rewane stated.
Energy expert and co-founder of Dairy Hills, Kelvin Emmanuel, said the decision to absorb logistics costs removes a major bottleneck that has long prevented Nigerians from enjoying the full benefits of local refining.
“It is a critical shift. For decades, our refineries were either dormant or underperforming. Even with locally refined fuel, the cost of logistics eroded consumer gains. Dangote is changing that,” Emmanuel noted.
Ibukun Phillips, an energy analyst, called the move “revolutionary”, especially for rural communities often burdened with higher fuel costs despite lower income levels.
“It’s not just about urban fuel pricing anymore. Rural stations can now receive fuel more regularly and at affordable prices, thanks to this CNG-powered distribution model.
“This will also revive abandoned retail stations and democratise access,” she said.
By opting for CNG-powered trucks, the refinery is taking a bold step toward environmental sustainability.
CNG emits significantly fewer greenhouse gases than traditional diesel or petrol engines, aligning with Nigeria’s climate targets and commitments under the Paris Agreement.
The construction of CNG refuelling stations across Nigeria is also expected to boost energy infrastructure, enabling future adoption of cleaner transportation technologies for both public and private fleets.
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