Marketers Seek Clarity from Dangote on New Fuel Supply Strategy as Ex-Depot Price Rises

Major marketers seek clarity on Dangote’s strategy amid depot price hike and CNG rollout plans.

MEMAN stresses caution, urging fair competition and proper infrastructure for new fuel initiatives.

SEE ALSO: Dangote Refinery Bypasses Middlemen, Begins Direct Fuel Distribution

The Major Energy Marketers Association of Nigeria (MEMAN) says it will initiate discussions with Dangote Petroleum Refinery to better understand its proposed fuel distribution strategy and its implications for Nigeria’s downstream oil market.

This was disclosed by MEMAN’s Executive Secretary, Clement Isong, during a webinar held on Thursday, June 19. According to him, the association is closely monitoring the market and plans to engage not only the refinery but also relevant stakeholders, including the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).

“We are currently observing the market and seeking to fully understand the developments. So far, we have only seen media reports. Before making any definitive comment or taking action, we need to assess how this move will affect the sector,” Isong said.

He emphasised that without concrete details from the Dangote refinery, especially regarding whether the plan involves a national pricing structure or maintains a deregulated approach, MEMAN will withhold judgment. “It would be premature to respond until we know how this will play out in practical terms,” he added.

CNG trucks: An opportunity amid infrastructure gaps

In a related development, Isong commended Dangote’s proposal to use Compressed Natural Gas (CNG)-powered trucks for fuel transportation, calling it a forward-thinking step aligned with government policy. However, he also highlighted the current limitations in Nigeria’s CNG infrastructure.

“CNG is already a government-backed policy, but it’s still in the early stages of implementation. The necessary infrastructure is not yet in place, so companies must plan carefully. Nonetheless, it’s bold of any company to seize such emerging opportunities,” Isong said.

He encouraged other members of the association to consider similar innovations, noting that the switch to CNG-powered logistics could eventually enhance efficiency and sustainability in the fuel distribution chain.

Navigating competition and market innovation

Addressing potential concerns over market dominance and anti-competitive practices, Isong stressed that regulators must strike a balance between promoting innovation and preventing monopolistic behavior.

“It’s an ongoing conversation. We support deregulation and open competition because they drive innovation and improve service delivery. We just need to ensure that consumer interest remains protected, even as major players like Dangote explore new models,” he explained.

He said the introduction of CNG as a transport option is one example of such innovation that MEMAN supports, noting it could be a catalyst for positive change if successfully implemented.

Price hike at the depot level

Dangote Refinery and several depot owners have raised the ex-depot price of Premium Motor Spirit (PMS), commonly known as petrol. The price has climbed from ₦825 per liter to ₦840, following rising global oil prices linked to the ongoing conflict between Israel and Iran, now in its fifth day.

This adjustment is significant as ex-depot prices determine how much marketers pay before fuel reaches the pump. The price hike may, therefore, impact retail fuel prices across the country unless offset by other market factors or government intervention.

What lies ahead?

With Nigeria still grappling with the ripple effects of fuel subsidy removal, market players are treading cautiously. MEMAN’s approach to hold consultations before concluding indicates that the sector may undergo a significant shake-up if Dangote’s plans unfold as expected.

For now, industry stakeholders await more details from the refinery, particularly around distribution logistics, pricing strategy, and how it aligns with regulatory policies. Until then, the marketers are adopting a wait-and-see approach, emphasizing dialogue and due diligence over premature assumptions.