Otedola Urges Oil Depot Owners to Sell as Dangote Refinery Transforms Market

Femi Otedola, a leading Nigerian businessman, has advised oil depot owners across Nigeria to dismantle their depots and sell them as scrap, following the commencement of operations at the Dangote Refinery. This advice reflects a significant shift in Nigeria’s energy market landscape instigated by the refinery’s impact and the evolving petroleum distribution environment.

Otedola highlighted that the Dangote Refinery, with a production capacity of 650,000 barrels per day, marks the end of fuel import dependency for Nigeria. He described this as economic liberation for the country, freeing it from years of reliance on imported petroleum products. He urged depot owners to adapt to these new market dynamics, signaling that traditional depot infrastructure will become increasingly irrelevant as the refinery scales its operations. Otedola shared from his experience with his Zenon depot business and hinted at the urgency, advising depot owners to sell their facilities while the scrap value remains high amid this market transformation.

The Dangote Refinery has accelerated the transition by acquiring and deploying large fleets of compressed natural gas (CNG) trucks—4,000 already operational with plans to add 6,000 more dry cargo trucks by the end of 2025—to streamline fuel distribution and ensure competitive pricing. This fleet modernization is part of a broader logistics innovation, and the refinery claims its direct fuel distribution strategy is creating tens of thousands of jobs, contrary to union concerns about potential job losses.

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However, Otedola’s call has drawn mixed reactions. Some industry observers view his advice as pragmatic, reflecting inevitable market reshaping driven by the refinery’s success. Conversely, key industry figures like Capt. Emmanuel Iheanacho have criticized the idea, cautioning against hastily dismantling existing depot infrastructure that still holds strategic value. The Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) has expressed discontent with the direct distribution model of the refinery, warning of potential disruptions and calling for government intervention.

As the Dangote Refinery expands its output and firmly establishes itself in Nigeria’s energy supply chain, the petroleum marketing sector faces a critical crossroads. Traditional marketers are calling on the government for support measures, such as subsidies or mandated discounts from the refinery, to help them adjust and innovate in this rapidly changing market. Echoing lessons from other disrupted industries—like how NITEL was overtaken by new technologies, and courier services rendered NIPOST less relevant—there is a consensus on the need for fuel marketers to reinvent their business models instead of resisting the inevitable transformation.

The Dangote Refinery’s groundbreaking entry into Nigeria’s oil sector underscores a seismic shift poised to foster economic independence, market efficiency, and technological advancement. For fuel marketers, adaptability will determine survival as the market evolves rapidly around the pioneering refinery’s footprint