Otedola warns DAPPMAN: Dangote Refinery will upend old fuel model

When Femi Otedola, billionaire businessman and founder of Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) warned that his own association’s model was “crumbling” against the Dangote Refinery, the stakes of Nigeria’s fuel market were suddenly crystal clear.

The opinion, printed on September 22, 2025, singled out Aliko Dangote, the refinery’s owner, and the long‑standing monopoly of the Nigeria National Petroleum Corporation (NNPC) as the old guard that could be left behind.

Background: DAPPMAN’s Rise and the Dawn of Domestic Refining

Back in 2002, Otedola launched DAPPMAN to give independent depot owners a fair platform in a market riddled with inefficiencies. At that time, depots were the missing link between NNPC’s supply chain and the countless petrol stations scattered across the country. The association grew into a powerful lobby, leveraging subsidies and pro‑form invoices – a system that, as Otedola now admits, fed “complacent importers” who chased arbitrage margins.

Fast forward to today, Nigeria boasts over 4 million metric tons of storage capacity, yet most of that space sits idle. The shift began when the government finally backed a truly local refining capacity, culminating in the launch of the $20 billion Dangote Refinery in Lagos. The old depot‑centric model, once a necessity, is now a relic.

The Dangote Refinery Disruption

Dangote’s plant, with a daily output of 650,000 barrels of gasoline, diesel and kerosene, has rewired the distribution network. Otedola highlighted the refinery’s fleet of 8,000 eco‑friendly trucks, a logistics chain that cuts transit time by half and slashes carbon emissions. Even seasoned players in Europe are shrinking depot footprints, turning many into bonded warehouses or shutting them down entirely – a trend Nigeria is now mirroring.

“With the refinery now supplying fuel locally, the old business model is crumbling,” Otedola wrote. He even advised some depot owners last year to consider selling their assets as scrap while there was still residual value. The warning is stark: cling to the past and risk bankruptcy.

Points of Contention: Pricing, Supply and Subsidy Allegations

DAPPMAN has accused the refinery of preferential pricing, claiming that certain buyers enjoy rates that undercut the market, allegedly creating a N1.5 trillion subsidy demand. The association argues that the refinery’s pricing strategy is opaque and harms consumers. In response, the Coalition of Refineries and Allied Companies of Nigeria (CORAN) urged calm and collaboration, emphasizing that price fairness is essential for consumer welfare.

The dispute echoes an earlier clash between Dangote and the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG), where disagreements over market structure and supply contracts also surfaced. This time, the battle is not just about prices but about who controls the future of the nation’s fuel supply.

Stakeholder Reactions and Industry Opinions

• Aliko Dangote – Stays silent publicly, but insiders say he views the refinery as a catalyst for self‑sufficiency.
• Femi Otedola – Calls for DAPPMAN members to either sell, restructure, or invest in new value chains, even suggesting a joint purchase of the Port Harcourt Refinery.
• Consumer groups – Fear fuel queues, especially after a warning on September 29, 2025, that tensions could ripple into supply disruptions.
• Industry analysts – Note that the refinery is on track to become a $100 billion enterprise within the next five to ten years, reshaping the entire downstream sector.

While Otedola praises Dangote’s vision, an editorial note in the same newspaper cautioned against celebrating a “retirement to Monaco,” arguing that continued effort from entrepreneurs like Dangote is what drives job creation across Africa.

What Lies Ahead: Potential Impact on Nigeria’s Fuel Landscape

The immediate implication is a possible re‑allocation of the idle storage capacity. Experts predict that the 4 million‑tonne warehouses could be repurposed as bonded storage for refined products, feeding a more transparent supply chain. If DAPPMAN adapts, it could transition from a depot‑focused body to a facilitator of logistics services, leveraging its network of dealers for last‑mile distribution.

Conversely, resistance could spark a wave of bankruptcies, consolidating market power in the hands of large refiners and a few multinational traders. The competition authority has already hinted at reviewing the pricing disputes for potential violations of Nigeria’s competition law.

In the longer term, the shift may accelerate Nigeria’s move toward energy independence, reducing reliance on imported gasoline and the associated foreign‑exchange outflows. The ripple effect could also spur ancillary industries – from truck manufacturing to renewable‑energy storage – as the country re‑tools its downstream ecosystem.