NOGASA slams Dangote's direct petroleum product supply plan

The Natural Oil and Gas Suppliers Association of Nigeria (NOGASA) has raised objections to Dangote Refinery’s plan to supply petroleum products directly to end users, citing potential disruptions to the oil and gas industry.

On 15 June, the Dangote Petroleum Refinery announced a major initiative to transform Nigeria’s fuel distribution landscape. At the time, the company said that effective 15 August, it will begin distributing petrol and diesel to marketers, petrol dealers, manufacturers, telecoms firms, aviation, and other large users nationwide.

It explained that the strategic programme is part of its broader commitment to eliminating logistics costs, enhancing energy efficiency, promoting sustainability and supporting Nigeria’s economic development.

In a statement on Monday, Benneth Korie, the president of NOGASA, said this move could significantly disrupt the oil and gas industry, putting thousands of jobs at risk and jeopardising the existing business models of suppliers nationwide.

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He explained that the plan could render the roles of its members, who serve as intermediaries between refineries and final consumers, 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 so doing, many jobs are at stake and we are kicking against this new way of supplying products to end users,” Mr Korie said.

Potential consequences

He warned that the plan could lead to the redundancy of trucks, drivers, and other logistical staff, having a ripple effect on the livelihoods of NOGASA members and the Nigerian economy.

“The redundancy of trucks, drivers, and other logistical staff looms as a direct result of the bypassed supply chain. It will remove jobs from a lot of them, and some of our staff will be redundant, and some of our trucks will be redundant,” he said.

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However, he said the association has scheduled a general meeting to develop a unified strategy to address the issue, including the possibility of downing tools and direct engagement with Dangote to seek a resolution.

He added that 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.

“We are holding a general meeting on the 31st, to decide whether to down tools and to find a way to ensure that Dangote will supply the product to them rather than supply to the end users. And we will, in turn, supply to the end users. These are chains of distribution.

“NOGASA insists that bypassing the traditional distribution mechanism is “not healthy for the oil and gas industry” and poses risks to its stability. The association is calling on all stakeholders to recognise the vital role that suppliers play not only in logistics but also in maintaining a balanced industry ecosystem.

“We are holding a meeting on the 31st of July at Chida Hotels to have a resolution and meet up with Dangote to ensure that they will have a relationship where Dangote should not supply products to end users. So that is the story. NOGASA kicks against Dangote for the direct supply to end users,” he said.