The Major Energies Marketers Association of Nigeria (MEMAN), in collaboration with S&P Global Energy, has highlighted both the vulnerabilities and emerging opportunities for West Africa’s downstream petroleum sector amid ongoing geopolitical tensions, particularly in the Middle East.
This was the focus of a virtual industry webinar that brought together global analysts and regional operators to assess the impact of the crisis on refined product markets, supply security, and Nigeria’s transition to a deregulated downstream regime.
Speaking in his opening remarks, MEMAN Chairman, Huub Stokman, said the evolving geopolitical landscape has introduced significant uncertainty into global energy markets, with disruptions to Iranian crude output and risks around the Strait of Hormuz—through which about 20 per cent of global oil supply flows—keeping markets on edge.
He noted that the situation has triggered volatility in oil prices, rising shipping and insurance costs, and a reconfiguration of global supply chains, as buyers seek alternatives to traditional crude sources.
“For the oil industry, this creates a double-edged reality—opportunities for producers but increased pressure on downstream operators and consumers,” Stokman said.
He added that West Africa, particularly Nigeria, stands at a strategic crossroads, with the potential to position itself as a reliable global energy partner, provided longstanding challenges such as pipeline security, regulatory transparency, and infrastructure deficits are addressed.
Providing a global outlook, Gary Clark of S&P Global Energy said geopolitical tensions have led to a sharp rise in middle distillate margins, with jet fuel and diesel markets experiencing significant price increases due to supply disruptions and heightened risk premiums.
He also pointed to logistical challenges, including vessel rerouting around the Cape of Good Hope, which has driven up freight costs and tightened near-term supply, especially in Europe.
On regional energy security, Stanislas Drochon noted that Sub-Saharan Africa remains highly exposed to global shocks due to its dependence on imports, limited refining capacity, and inadequate storage infrastructure.
He stressed that achieving long-term energy security—defined by reliability, affordability, and accessibility—will require sustained investment across refining, storage, and supply chain systems.
Focusing on Nigeria, Joe Nwakwue described the country’s shift to a deregulated downstream market as a transitional phase characterised by price volatility and structural adjustments. He noted that despite increasing domestic refining capacity, fuel pricing remains closely tied to international benchmarks.
He emphasised the need for a competitive and well-regulated market framework, supported by policy clarity and access to diverse supply sources.
Offering an industry perspective, Stokman said Nigeria’s growing domestic refining capacity, including the Dangote Refinery, provides some buffer against global supply disruptions but also introduces concentration risks.
He explained that domestic fuel prices continue to reflect global market trends and that perceived delays in price reductions are largely due to inventory cycles and working capital requirements.
Stokman further disclosed that Nigeria currently maintains over 30 days of petrol (PMS) supply coverage, with NNPC Limited continuing to act as the supplier of last resort.
The webinar, moderated by MEMAN Executive Secretary Clement Isong, underscored that while Nigeria is relatively better positioned than many regional peers, it remains deeply integrated into global energy markets.
Participants agreed that building resilience in West Africa’s downstream sector will depend on sustained policy consistency, infrastructure development, effective regulation, and competitive market structures.
They added that although short-term volatility is likely to persist, ongoing reforms in Nigeria could lay the groundwork for a more efficient and responsive energy market in the region.
