There is a huge shake-up in Nigeria's downstream sector following Dangote Petroleum Refinery's announcement on Sunday, June 15, of direct free distribution of Premium Motor Spirit (PMS) and diesel across the country.

The operation will commence on August 15, 2025. This will be achieved using 4,000 brand-new Compressed Natural Gas (CNG)-powered tankers to directly serve petrol stations, manufacturers, aviation firms, telecom companies, and other bulk fuel users.

The refinery move means that traditional depots and middlemen will be bypassed in a sweeping strategy that could permanently alter fuel supply distribution across the country.

Dangote announces fuel bonanza

Aside from free distribution, Dangote Refinery is introducing a credit facility for high-volume buyers. Customers buying 500,000 litres or more will be eligible to receive an additional 500,000 litres on a two-week credit, backed by a bank guarantee.

The incentive is expected to ease operational pressures for major fuel consumers such as manufacturers and telecommunication companies. BusinessDay reports.

How Dangote is changing the game of petroleum distribution Industry experts have reacted to the move by the Dangote Refinery. One of them, Kelvin Emmanuel, said it will help the federal government know the actual retail consumption in Nigeria.

He said: “Dangote is now playing the role once held by the Petroleum Equalization Fund, which aimed to ensure uniform fuel pricing nationwide. For years, regulators have failed to publish accurate bridging allowances due to mismatches between reported consumption and actual supply.

"This initiative will help the government determine true daily fuel use likely under 30 million litres and ensure direct delivery to station owners at uniform rates, reducing price disparities and easing inflation driven by energy costs.”

Another energy expert described Dangote's move as a game-changer.

He said: “This is the Uber moment for Nigeria’s fuel sector. With 4,000 CNG tankers, the refinery can deliver directly to any station nationwide. This removes the need for unless they can offer something dramatically better or cheaper"

A concerned depot operator in Apapa, who requested anonymity, said:

“If marketers can now source fuel directly at competitive rates and get free transportation, we’re left with little value proposition.”