The Dangote Petroleum Refinery has teamed up with major fuel marketers to strengthen the distribution of petroleum products across Nigeria and reduce the risks linked to relying on a single supply source.
This was disclosed by the Major Energies Marketers Association of Nigeria during a webinar, where its chairman, Hubb Stokman, explained that the collaboration is designed to improve efficiency in the downstream sector while addressing concerns about supply concentration.
Stokman noted that although Nigeria now has a refinery capable of meeting a significant portion of local demand, depending heavily on one facility comes with potential vulnerabilities. According to him, distributing products through multiple marketers helps create a more flexible and resilient supply system.
He added that the arrangement was developed with input from regulators to ensure it aligns with market realities and supports smoother nationwide distribution.
The MEMAN chairman also pointed to recent instability in the global oil market, driven by tensions in the Middle East, as a reminder of the need for adaptable supply strategies. He said the crisis emerged shortly after the new supply framework was introduced, causing rapid shifts in global pricing.
Despite this volatility, he said Nigeria’s market has responded positively so far, noting that both the refinery and industry players have shown the ability to adjust quickly. However, he stressed that maintaining flexibility would be crucial in navigating ongoing uncertainties.
On fuel pricing, Stokman explained that Nigeria’s deregulated market still reflects international benchmarks, meaning domestic prices continue to move in line with global trends.
Speaking on imports, he praised the approach of the Nigerian Midstream and Downstream Petroleum Regulatory Authority, noting that fuel importation is currently based on actual supply needs. He added that the country has maintained over 30 days of petrol stock, providing a buffer against supply disruptions.
He also highlighted the continued importance of the Nigerian National Petroleum Company Limited, describing it as a key player in ensuring stability by acting as a supplier of last resort when necessary.
In a separate contribution, energy expert Joe Nwakwue of Zeta Advisory emphasised the need for a competitive market structure. He warned that relying on a single dominant refinery could create pricing risks if alternative supply options are limited.
Nwakwue argued that allowing fuel imports remains essential to maintaining competition and preventing price distortions. He explained that the presence of importers helps keep local pricing in check, as the refinery must remain competitive.
He further noted that Nigeria is still exposed to global oil price swings, as domestic fuel pricing is tied to international crude benchmarks such as Brent. As a result, external shocks are quickly transmitted to the local market.
To reduce this exposure, he suggested that policies like the naira-for-crude arrangement could include built-in buffers to cushion the impact of global price fluctuations.
The expert also raised concerns about regulatory uncertainty, warning that inconsistent policies could weaken investor confidence. He called for clearer and more predictable guidelines to support market stability.
On the economic impact, Nwakwue cautioned that excessively high fuel prices could slow growth, stressing the need for targeted and temporary measures to prevent extreme price spikes without returning to long-term subsidy regimes.
Overall, industry stakeholders expressed confidence that with a mix of local refining, controlled imports, and effective regulation, Nigeria can maintain steady fuel supply while adapting to global market pressures.
