Table of Contents
Key Points
- Dangote Refinery launches $467 million CNG logistics to cut Nigeria fuel transport costs by $1.1 billion annually.
- Deploying 4,000 CNG trucks boosts energy distribution, lowers pump prices, and supports 42 million MSMEs.
- Project creates 15,000+ jobs, advances Nigeria’s energy security, and aligns with carbon reduction goals.
The Dangote Petroleum Refinery, Africa’s largest refinery owned by the continent’s richest billionaire Aliko Dangote, has launched a bold $467 million push into compressed natural gas (CNG) logistics, aiming to transform Nigeria’s energy distribution model and slash fuel transport costs by $1.1 billion annually.
The Dangote Petroleum Refinery, located in Lagos, is deploying 4,000 CNG-powered trucks nationwide to deliver petrol, diesel, and aviation fuel directly to filling stations and industrial hubs. The move eliminates middlemen, bridging costs, and long-haul trucking inefficiencies that have plagued Nigeria’s downstream oil sector for decades.
The cost-saving strategy—covering over N1.7 trillion ($1.1 billion) annually—could significantly ease inflationary pressures, lower pump prices, and revive over 42 million micro, small, and medium enterprises (MSMEs) grappling with high energy costs.
August launch to tackle fuel price shocks
From August 15, the refinery will begin direct delivery of refined products to meet the country’s daily demand of 65 million liters—comprising 45 million liters of petrol, 15 million liters of diesel, and 5 million liters of aviation fuel.
Average logistics costs in Nigeria are estimated at N45 per ($0.03) liter, a figure Dangote is set to absorb through a CNG distribution model supported by new CNG mother-and-daughter stations. The investment not only reduces reliance on costly diesel trucks but also aligns with sustainability targets and carbon reduction goals.
“Dangote’s initiative bypasses systemic inefficiencies and sets a national benchmark,” said Bismarck Rewane, CEO of Financial Derivatives Company.
Jobs, access, and economic stimulus
The project is expected to create over 15,000 direct jobs, from drivers to CNG station attendants. It could also resuscitate dormant filling stations in rural areas and boost fuel access in underserved communities. “This is a transformative step for Nigeria’s energy security,” said Tosin Coker of the Presidential Compressed Natural Gas Initiative. “It signals that CNG is now a viable, scalable solution—not just an idea.”
Independent Petroleum Marketers Association of Nigeria (IPMAN) called it a “timely intervention,” praising the refinery for lifting a significant burden off downstream marketers long hampered by broken pipeline infrastructure.
Global ambitions and market expansion
The Lagos-based refinery, now producing 500,000 barrels per day and targeting 650,000 bpd by year-end, has begun its first gasoline export to Asia. After ending Nigeria’s decades-long dependence on imported fuel, and is now eyeing global markets including the U.S. and Asia.
Dangote Group aims to hit $30 billion in revenues by 2026, with petrochemicals and fertilizer exports driving growth. A planned listing of Dangote Fertilizer—valued at $3 billion—will further deepen the conglomerate’s footprint on the Nigerian Exchange (NGX). With a net worth of $27.8 billion, Aliko Dangote continues to reshape Africa’s industrial landscape—this time with cleaner fuel, lower costs, and a nationwide energy upgrade.
