Dangote Refinery launches CNG Trucks for nationwide Fuel distribution

The Dangote Refinery and Petrochemicals will today roll out its Compressed Natural Gas (CNG) trucks to commence the nationwide distribution of Premium Motor Spirit (PMS).

The refinery had announced in August that it received the first batch of its 4,000 CNG-powered trucks for the fuel distribution programme, initially scheduled to start on August 15.

Speaking on Sunday during a courtesy visit by the AfricaRice Centre at his Lagos office, Aliko Dangote said the decision to adopt direct fuel distribution was aimed at reducing reliance on third-party carriers, describing the move as both strategic and essential for Nigeria.

This development comes amid criticism from the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN), which accused the refinery of offering lower prices to international buyers while quoting higher rates to local distributors. The association also alleged that the refinery’s refusal to offer free delivery, price cuts, and bypass of marketers was a move to monopolise the downstream sector, though they acknowledged the facility currently meets only 30 to 35 per cent of Nigeria’s fuel needs.

Dangote dismissed the claims, saying the refinery opted out of the Single Point Mooring (SPM) system to avoid an extra N75 per litre in handling charges, a cost that would amount to about N1.5 trillion annually.

A statement from the refinery read: “If the Dangote Refinery were to load 40 million litres of PMS and 15 million litres of diesel via the Single Point Mooring (SPM) at an extra cost of N75 per litre in handling charges, it would amount to approximately N1.5 trillion annually in avoidable charges. By contrast, utilising gantry loading and direct trucking would eliminate these costs entirely, resulting in substantial savings that could be redirected towards critical infrastructure investments. Losing N75 per litre to intermediaries who cannot guarantee delivery to Nigerian consumers is not a viable option.”

The N720 billion CNG trucking project, which began in August, is designed to cut logistics costs, reduce the environmental impact of fuel distribution, and benefit over 42 million micro, small, and medium enterprises (MSMEs) by lowering energy costs.

The trucks, supplied with CNG by Tetracore Energy Group, will transport refined products directly from the refinery, marking a significant shift in Nigeria’s petroleum distribution system.