Band gap fluctuations and carrier localization in AlxGa1-xN films with x values varying from 0.30 to 0.50 has been studied by scanning near-field optical microscopy (SNOM) by measuring photoluminescence. The measurements have revealed a dual localization potential. Microscopic scale potential variations, detected by the SNOM, were most pronounced in the lower Al content samples. The nanoscopic carrier localization potentials, evaluated from the width of the photoluminescence spectra, were largest in layers with the largest AlN molar fraction. The large scale potential fluctuations were attributed to Ga rich regions close to grain boundaries or atomic layer steps. The density, size and band gap energy of these domains were found to be composition dependent. The nanoscopic potential variations have been assigned to small-scale compositional fluctuations, possibly, occurring due to formation of Al rich grains during growth.