Nigeria’s downstream petroleum operators are facing mounting strain from the ongoing global oil crisis, even as shifting market conditions create fresh opportunities, the Major Energies Marketers Association of Nigeria has said.
The group made this known during a midweek webinar held in collaboration with S&P Global, where industry experts examined the impact of Middle East tensions, supply risks, and Nigeria’s transition to a deregulated downstream sector.
MEMAN Chairman, Huub Stokman, described the current situation as a “double-edged” scenario. According to him, while higher prices and supply disruptions may favour crude producers, they are squeezing downstream operators and consumers through rising costs.
He pointed to increasing volatility in the global market, including higher shipping and insurance expenses, as well as sudden changes in crude sourcing as countries look for alternative supplies.
Despite these challenges, MEMAN noted that West Africa’s downstream sector has remained relatively resilient. However, Stokman stressed that Nigeria must tackle long-standing issues such as pipeline vandalism, unclear regulations, and weak infrastructure if it hopes to fully benefit from the current market dynamics.
He added that local refining capacity particularly output from the Dangote Refinery could help cushion external shocks, although reliance on a limited number of supply sources still poses risks.
While fuel availability remains stable, with more than 30 days of petrol supply in the country, prices continue to mirror global trends. Delays in price adjustments, he explained, are often linked to inventory cycles and financing constraints faced by operators. The NNPC Limited also continues to serve as a supplier of last resort.
On the global outlook, Gary Clark noted tightening refined product markets, especially for diesel and jet fuel, driven by supply disruptions and rising risk premiums. He said longer shipping routes particularly around the Cape of Good Hope are further increasing freight costs and limiting supply, especially in Europe.
Another industry expert, Stanislas Drochon, warned that Sub-Saharan Africa remains exposed due to heavy reliance on imports, inadequate refining capacity, and limited storage infrastructure. He emphasised that true energy security goes beyond supply, requiring consistent investment to ensure affordability and reliability.
The global oil market remains fragile, with concerns over disruptions to Iranian output and security threats around the Strait of Hormuz continuing to unsettle supply chains and pricing.
Meanwhile, marketers say the impact is already being felt at the retail level. Higher petrol prices have significantly reduced demand, as many consumers cut back on purchases. Operators also report needing more capital to procure products, while returns remain too low to offset rising borrowing costs.
Industry stakeholders believe that although short-term volatility is unavoidable, ongoing reforms in Nigeria’s oil sector could help turn current uncertainties into long-term stability.
