Lagos, Nigeria — Private petroleum depots in Lagos and surrounding areas were largely deserted yesterday following the rollout of direct petrol supplies by the Dangote Petroleum Refinery, a move that marks a significant shift in Nigeria’s downstream oil market.
The refinery, which began releasing Premium Motor Spirit (PMS) directly to marketers, has disrupted the long-standing practice where independent marketers and retailers relied heavily on private depots for fuel distribution. By bypassing intermediaries, the new system is expected to lower costs and improve efficiency across the supply chain.
Industry sources confirmed that several depots in Apapa and other key distribution hubs recorded minimal activity, with tanker drivers and marketers heading directly to the Dangote facility to secure products at more competitive prices.
Depot operators expressed concern that the refinery’s direct-to-market model could erode their relevance in the sector. “Our facilities are empty because everyone is going straight to Dangote. If this continues, private depots may not survive,” one depot manager told reporters on condition of anonymity.
Union groups have also voiced apprehension, warning that the development could trigger job losses among depot workers and tanker associations. They cautioned against what they described as potential “monopolistic control” of the supply chain.
However, industry analysts argue that the shift could bring long-term benefits, including reduced pump prices for consumers, improved product availability, and less dependency on foreign imports. The Dangote Refinery, with a capacity of 650,000 barrels per day, is positioned as the largest single-train refinery in the world and is central to Nigeria’s ambition to achieve fuel self-sufficiency.
A senior official of the refinery, responding to concerns, stated that the new supply framework was not designed to eliminate depots but to ensure stability in the market. “Our objective is to make petrol affordable and accessible. The distribution strategy is in the interest of the Nigerian economy,” the official said.
With the direct supply system now in motion, industry observers say the coming weeks will determine how private depots adapt to the new realities of a downstream sector increasingly shaped by the Dangote Refinery’s operations.
