Oil, Gas Suppliers Reject Direct Distribution of Petroleum Products to End Users

•Say it threatens oil industry jobs

Emmanuel Addeh in Abuja

The Natural Oil & Gas Suppliers Association of Nigeria (NOGASA) yesterday raised strong objections to the recent plan announced by the Dangote Refinery to supply petroleum products directly to end users and bypass the traditional distribution chain.

In a statement in Abuja, NOGASA’s President, BennethKorie, voiced concerns that 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.

The Dangote Refinery had announced plans to begin direct supply of petroleum products to end users effective August 15, 2025, revealing that it would deploy 4,000 new Compressed Natural Gas (CNG)-powered tankers.

The management of the refinery added that this will ensure the nationwide distribution of Premium Motor Spirit (PMS) or petrol and diesel directly to marketers, petrol dealers, manufacturers, telecom firms, aviation companies, and other large consumers, bypassing traditional depots and intermediaries.

However, Korie argued that Dangote’s decision to supply products directly to large organisations such as telecommunications giants and hotels, will mark a notable shift in the sector.

He stated that members of NOGASA, who  serve as intermediaries between refineries and final consumers, fear that this new distribution model will 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 are at stake and we are kicking against this new way of supplying products to end users,” Korie stated.

Korie elaborated on the potential consequences, highlighting that many NOGASA members and their employees could lose their jobs. The redundancy of trucks, drivers, and other logistical staff, he said, looms as a direct result of the bypassed supply chain.

This, according to the association, 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 will be redundant, some of our trucks will be redundant,” Korie warned.

He said NOGASA has scheduled a general meeting for July 31 at Chida Hotels, Abuja, noting that the agenda will focus on developing a unified strategy to address the issue, including the possibility of downing tools and direct engagement with Dangote to seek a resolution.

The association, Korie said,  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 July 31, to decide whether to down tools and to find a way to ensure that Dangote will supply the products to them rather than  supply to the end users. And we will in turn supply to the end users. These are chains of distribution and they should be preserved,” Korie explained.

NOGASA insisted that bypassing the traditional distribution mechanism is “not healthy for the oil and gas industry” and poses risks to its stability and called 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 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,” he added.