…how govt can compliment Dangote Refinery fuel distribution strategy
In the midst of applauds and criticisms over Dangote Refinery initiative to engage 4000 Compressed Natural Gas fuelled trucks for the distribution of fuel across the country, Policy & Development Analysis Desk has formulated a Policy Brief that could help to further strengthened the country’s fuel distribution system and also compliment Dangote’s effort.
According to them, Dangote’s CNG logistics model is progressive but not comprehensive.
“The Policy Brief blow can facilitate smooth progress and development to exit from the observed and perceived militating against robust achievement of a well developed transportation system for the national resource”
Policy Brief
Title: Rethinking Nigeria’s Petroleum Distribution: Toward a Sustainable, Multi-Modal Logistics Future
Executive Summary: The recent N720 billion investment by Dangote Refinery into 4,000 CNG-powered trucks marks a landmark shift in Nigeria’s fuel distribution strategy. While commendable, this truck-centric logistics model exposes systemic gaps, particularly in road sustainability, railway underdevelopment, and the lack of a multi-modal approach. This brief proposes a balanced path forward that integrates rail, pipeline, and IT-driven logistics infrastructure to ensure long-term sustainability, reduced transport costs, and equitable national development.
- Context and Background
Dangote’s initiative aims to distribute 65 million litres of fuel daily, absorb N1.07 trillion in logistics costs annually, and stimulate MSME growth.
The programme focuses on road-based logistics using CNG-powered trucks and excludes significant use of rail or pipeline infrastructure.
Challenges Identified:
- Overdependence on deteriorating road networks
- Abandonment of railway logistics
- Pipeline infrastructure neglect
- Underutilization of IT in transport security and coordination
- Inefficient, unsustainable logistics for national scale
- Strategic Weaknesses in the Current Model
Trucks, regardless of fuel type, continue to strain poorly maintained roads.
The model neglects rail transport, which offers a lower-cost, higher-volume, and more environmentally friendly alternative.
Lack of pipeline rehabilitation compounds security and cost issues.
IT gaps persist in monitoring, tracking, and optimizing fleet logistics.
III. Strategic Recommendations
- Prioritize Rail Logistics Infrastructure, complete and modernize strategic rail corridors (Lagos-Kano, PH-Maiduguri, Kaduna-Abuja).
Encourage Public-Private Partnerships (PPP) for freight rail operations.
Integrate railheads with depots, dry ports, and filling stations.
- Develop a National Intermodal Logistics Master Plan
Synchronize road, rail, pipeline, and inland waterways.
Establish intermodal depots and hubs in all six geopolitical zones.
Coordinate Dangote trucks to complement, not replace, rail logistics.
- Rehabilitate and Concession Fuel Pipeline Infrastructure
Restore strategic pipeline routes linking depots and refineries.
Incentivize private investment and security partnerships.
- Institutionalize Road Maintenance Reform
Dedicate a portion of fuel tax and toll collections to dual carriageway upgrades.
Enforce axle-load regulations on trucks.
- Deploy IT-Driven Logistics Systems
Launch a National Logistics Monitoring System (NLMS) for tracking.
Adopt AI/IoT for route planning, predictive maintenance, and theft prevention.
- Reform National Transport Policy
Legally mandate multi-modal transport prioritization.
Create inter-agency coordination councils to oversee logistics development.
- Prevent Monopolistic Logistics Models
Support logistics participation by other refiners and marketers.
Introduce logistics cost-sharing or subsidy frameworks for SMEs and rural operators.
- Conclusion Dangote’s CNG logistics model is progressive but not comprehensive. Nigeria must avoid repeating past mistakes of single-mode infrastructure investment. Sustainable development demands a diversified logistics ecosystem with strong railway revival, secure pipeline systems, and a robust IT backbone. A national intermodal master plan, supported by policy reforms and public-private partnerships, is Nigeria’s most credible path forward.
