In a bold move poised to transform Nigeria’s downstream petroleum sector, the Dangote Petroleum Refinery has unveiled a ₦720 billion investment in a nationwide Compressed Natural Gas (CNG)-powered fuel distribution initiative, a strategic plan expected to save the country over ₦1.7 trillion annually.
According to a statement issued by the Dangote Group, the landmark programme includes the deployment of 4,000 CNG-powered trucks to overhaul the country’s petroleum logistics network.
The initiative will absorb over ₦1.07 trillion in annual transportation costs, currently borne by fuel marketers and industrial users, thereby reducing pump prices and enhancing energy affordability across Nigeria.
“Dangote Petroleum Refinery has invested over ₦720 billion to implement its landmark initiative of deploying 4,000 CNG-powered trucks for the nationwide distribution of petroleum products,” the company announced. “This is expected to save Nigerians over ₦1.7 trillion annually.”
As part of the project’s rollout, the refinery will, from August 15, begin direct deliveries of petrol and diesel to filling stations, manufacturing hubs, and other large-scale consumers. The plan bypasses traditional intermediaries and reduces dependence on aging fuel depots and costly bridging arrangements.
The initiative aims to deliver significant operational cost reductions for over 42 million Micro, Small, and Medium Enterprises (MSMEs) in Nigeria, many of which cite high energy costs as a major barrier to growth and profitability.
Nigeria’s daily refined fuel consumption is estimated at 65 million litres, comprising 45 million litres of petrol, 15 million litres of diesel, and 5 million litres of aviation fuel.
With an average transportation cost of ₦45 per litre, the Dangote refinery’s CNG-powered fleet will take on a logistics burden of over ₦1.07 trillion annually, effectively eliminating distribution charges for marketers.
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The refinery’s move is in line with its broader vision of establishing a fully integrated, cost-efficient, and environmentally friendly fuel supply chain, using Nigeria’s abundant natural gas resources to power a cleaner and cheaper distribution network.
The initiative has drawn widespread commendation from government agencies, economists, and industry stakeholders.
The Presidential Compressed Natural Gas Initiative (PCNGI) hailed the scheme as “a pivotal milestone” in Nigeria’s energy transition. Tosin Coker, Commercial Coordinator at PCNGI, described the acquisition of 4,000 CNG trucks as both “strategic and visionary.”
“It sends a strong market signal that CNG is a viable, cost-effective, and sustainable solution to Nigeria’s energy and logistics challenges,” Coker said.
The Independent Petroleum Marketers Association of Nigeria (IPMAN) also lauded the development. Chinedu Ukadike, IPMAN’s National Publicity Secretary, noted that the move would relieve marketers of a long-standing burden.
“Our pipelines have been dormant for years. We’ve had no choice but to rely on expensive transport from coastal depots. Dangote’s direct distribution model brings huge relief,” he said.
Professor Ken Ife, development economist and policy advisor, emphasized that the plan would not only lower fuel prices but also stimulate broader economic benefits for businesses and consumers alike.
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Meanwhile, renowned economist and Financial Derivatives CEO, Bismarck Rewane, dismissed fears of market dominance by the Dangote Group, arguing that the company’s intervention addresses longstanding inefficiencies and reduces the influence of middlemen who have historically inflated fuel prices.
“What Dangote is doing will help unify prices nationwide by removing bridging costs,” Rewane said. “The use of CNG trucks improves distribution efficiency, lowers emissions, and even provides credit access to retailers — something middlemen have never done.”
Analysts say the Dangote CNG-powered logistics initiative represents a model for sustainable energy practices in the developing world. With mounting pressure on oil-producing nations to decarbonize and diversify energy infrastructure, the programme aligns with both environmental goals and economic imperatives.
As fuel distribution becomes more efficient and cost-effective, observers believe Nigeria could see a broader ripple effect — including improved price stability, strengthened MSME competitiveness, and increased investor confidence in the downstream sector.