Dangote suspends fuel discount initiative over suspected fraud

The Dangote Group has suspended its recently introduced fuel discount programme following allegations of widespread fraudulent activities by marketers and distribution agents. The initiative, which was designed to cushion the impact of high pump prices on transporters and logistics operators, came to an abrupt halt as the conglomerate began investigating irregularities surrounding the scheme’s implementation.

The fuel discount initiative, which was launched through Dangote Petroleum Refinery, was aimed at offering discounted diesel and other petroleum products to selected sectors of the economy, particularly those involved in mass transportation, agriculture, and essential services. The scheme was widely lauded for its potential to reduce operational costs and stabilize market prices.

However, less than a few months into its rollout, internal audit teams and whistleblower reports began to uncover significant anomalies. It was discovered that several middlemen, including registered and unregistered fuel marketers, were allegedly diverting the discounted products meant for targeted beneficiaries. Some were reportedly reselling the products at inflated rates on the open market, thereby undermining the core objective of the scheme.

Dangote Group, in a statement issued through its corporate communications unit, confirmed the suspension of the discount programme and emphasized its commitment to transparency and accountability in its operations. The company noted that the decision to pause the initiative was not taken lightly but was necessary to address the fraud concerns and re-evaluate the distribution model.

According to the statement, “We are deeply concerned about the misuse of the discount arrangement, which was structured to provide economic relief to critical sectors. The fraudulent exploitation of this goodwill measure compromises not only our brand integrity but also the broader economic intention behind it. As such, we have temporarily suspended the initiative pending a full-scale audit and system overhaul.”

Sources within the oil and gas sector revealed that some marketers had obtained the discounted products through false claims, using forged documentation to qualify under the scheme’s eligibility criteria. Others allegedly rerouted the fuel to black-market outlets, where they were sold at higher-than-official prices, effectively profiting off a subsidy meant for struggling businesses and consumers.

Industry stakeholders have expressed concern over the development. While they praised Dangote Group’s efforts to make fuel more affordable amid ongoing energy challenges, they also called for stronger oversight and collaboration with regulatory bodies such as the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and the Department of Petroleum Resources (DPR) to plug loopholes in the system.

Transport unions and representatives of agricultural cooperatives, two key beneficiaries of the discount programme, lamented the suspension but acknowledged the need for thorough investigation. Many stated that they had not been receiving the full benefit of the scheme and had long suspected that some marketers were manipulating allocations.

“We applaud the initiative when it started. It brought some relief. But gradually, it became clear that something was wrong. The volume allocated to us on paper was not what we received in reality,” said a spokesperson for a national truckers association. “We hope the suspension is temporary and the system can be restructured to favour genuine end users.”

Meanwhile, economic analysts noted that the suspension could have short-term implications for logistics costs and market supply chains, particularly in the food and transportation sectors. They advised that any revised framework for the scheme should include digital tracking, product authentication, and tighter distributor vetting to ensure integrity.

They also suggested partnering with civil society and independent auditors to monitor future iterations of the scheme, along with direct-to-consumer models that reduce the role of intermediaries. This, they argued, would minimize the risk of diversion and ensure transparency.

The Dangote Refinery, located in Lekki Free Zone, Lagos, and touted as Africa’s largest single-train refinery, had only recently begun domestic distribution of refined petroleum products. The discount programme was part of the company’s broader corporate responsibility strategy, aimed at alleviating economic hardship as Nigeria continues to grapple with high energy costs and inflation.

Observers say that the swift suspension of the programme demonstrates the group’s sensitivity to operational integrity and public trust. However, they caution that failure to resume the scheme under a more robust framework could erode confidence among its target beneficiaries and the public.

As the company intensifies its internal investigation, it has promised to work closely with regulators and law enforcement where necessary. The Dangote Group also hinted that some distributors could face legal action or blacklisting if found complicit in the fraudulent practices.

For now, transporters, farmers, and logistics operators will have to revert to regular market prices for petroleum products, pending the outcome of the audit. The Dangote Group, while reiterating its commitment to supporting the Nigerian economy, stated that it would only resume the discount scheme when it is satisfied that adequate safeguards are in place to prevent future abuses.

The development underscores the broader challenges in managing relief schemes in Nigeria’s petroleum sector, where transparency issues have long plagued distribution frameworks. Whether Dangote’s move sets a new standard for corporate accountability or highlights the systemic gaps yet to be addressed remains to be seen.