Nigeria’s fuel supply outlook received a boost as the Dangote Petroleum Refinery partnered with major marketers to ensure steady nationwide distribution and reduce dependence on a single supply source. The move, confirmed by the Major Energies Marketers Association of Nigeria, is aimed at strengthening efficiency in the downstream sector while addressing concerns over concentration risks.
Speaking during a MEMAN webinar, Chairman Hubb Stokman described the collaboration as a strategic step toward securing Nigeria’s fuel market. While acknowledging the advantage of having a large local refinery capable of meeting domestic demand, he noted that relying heavily on one facility could expose the country to operational risks, especially during global disruptions.
Stokman explained that distributing supply through multiple marketers not only improves efficiency but also enhances resilience in times of uncertainty. He pointed out that the ongoing Middle East crisis has already triggered volatility in global oil prices, reinforcing the need for flexible supply systems. Despite these challenges, he expressed confidence that the current arrangement is working and helping the Nigerian market respond quickly to changing conditions.
The partnership was also developed in consultation with regulators, including the Nigerian Midstream and Downstream Petroleum Regulatory Authority, to ensure alignment with market realities. According to Stokman, Nigeria currently maintains over 30 days of petrol stock, providing a comfortable buffer for supply security. He added that the Nigerian National Petroleum Company Limited continues to play a critical role as a supplier of last resort, ensuring stability across the country.
Industry experts, however, stress the importance of maintaining competition. Joe Nwakwue of Zeta Advisory warned that allowing fuel imports remains essential to prevent market dominance and price distortions. He noted that Nigeria’s fuel prices still track global benchmarks like Brent crude, meaning international fluctuations will continue to impact local prices. While advocating for policy clarity, he urged the government to consider temporary measures to cushion extreme price hikes and protect economic growth without returning to full-scale subsidies.
source: punch