The Major Energies Marketers Association of Nigeria (MEMAN) and S&P Global Energy have called for transparent, market-driven petroleum pricing and stronger supply coordination to improve competition, protect consumers and prevent distortions in Nigeria’s downstream oil and gas market.
The organisations warned that opaque pricing mechanisms, inefficient distribution and weak supply coordination could undermine market stability, urging policymakers and industry operators to prioritise credible pricing benchmarks, reliable market data and fair access to petroleum products.
The recommendations emerged during MEMAN’s third-quarter press engagement, organised through its Industry Competency Centre in partnership with S&P Global Energy to examine global and West African refined petroleum markets and identify measures to strengthen Nigeria’s domestic distribution system.
Speaking at the engagement, MEMAN Executive Secretary and Chief Executive Officer, Clement Isong, said Nigeria needed predictable pricing arrangements, efficient distribution infrastructure and fair competition to build a resilient petroleum market.
He advocated better coordination between domestic refinery output and imported petroleum products, with imports serving as a buffer when local production falls short of demand or supply disruptions occur.
Isong also rejected arbitrary government-imposed price caps as a sustainable solution to the country’s downstream market challenges, arguing that transparent pricing and improved operational efficiency would provide a stronger foundation for competition and supply security.
He said clearly defined bulk supply agreements covering product access, pricing, delivery schedules and contractual obligations would reduce uncertainty for marketers and improve distribution efficiency.
MEMAN seeks transparent pricing, reliable supply
Isong identified inventory visibility, adequate storage capacity, coordinated transportation and effective contingency planning as essential to strengthening Nigeria’s petroleum supply network.
He also called for transparent market information, non-discriminatory access to products and efficient regulatory processes to enable businesses to compete on fair terms.
According to him, consumer confidence depends not only on competitive prices but also on consistent product quality, accurate measurement and the delivery of the quantities customers pay for.
MEMAN commended the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) for its efforts to improve product quality, digitalise licensing processes, publish market data and promote competition.
The association maintained that Nigeria should focus on market-driven pricing, lower operating costs and the removal of supply bottlenecks rather than rely on price controls or broad-based fuel subsidies.
A more efficient market, it argued, would encourage investment, improve supply security and deliver better outcomes for consumers by reducing avoidable costs across the distribution chain.
S&P Global highlights need for West African pricing benchmarks
S&P Global Energy representatives Gary Clark, Associate Editorial Director for EMEA Clean Refined Products, and Matthew Tracey-Cook, Lead Specialist for Africa Refined Products Pricing, examined developments in global refined petroleum markets and the importance of credible regional pricing benchmarks.
They noted that geopolitical tensions, refinery disruptions and changing international supply patterns had contributed to price volatility, particularly in middle distillates such as diesel and aviation fuel.
The experts stressed that stronger pricing references reflecting actual West African market conditions would improve price discovery, strengthen transparency and support commercial decision-making by refiners, importers and marketers
The engagement highlighted the FOB West Africa (FOBWAF) and STS Lomé assessments as reference points for evaluating domestically supplied and imported refined petroleum products, respectively.
Participants said wider adoption of credible benchmarks would depend on reliable transaction data, transparent market assessments and greater participation by industry operators.
Developing a recognised West African reference market could help businesses assess supply costs more accurately, negotiate contracts with greater confidence and reduce uncertainty in regional petroleum trading.
Technology, CNG seen as ways to reduce distribution costs
The discussions also examined how technology and alternative fuels could improve operational efficiency and reduce petroleum distribution costs.
Participants identified compressed natural gas (CNG) as an opportunity to lower transportation costs, while automation across depots, tanker trucks and filling stations could improve operational control and measurement accuracy.
They also highlighted the need for better transportation infrastructure and automated measurement systems to reduce product losses, strengthen accountability and improve consumer confidence.
The session was moderated by Ogechi Nkwoji, MEMAN’s Head of Economic Intelligence, Research and Regulation.
The engagement underscored the importance of aligning petroleum pricing with market realities while improving supply coordination, regulatory transparency and distribution efficiency.
For Nigeria, the challenge is to establish a competitive downstream market in which credible pricing benchmarks, reliable supplies and lower operating costs support both commercial sustainability and consumer interests.
Clarify the pricing benchmark distinction.
The key distinction is that FOB West Africa (FOBWAF) and STS Lomé represent different pricing and delivery contexts. The story should explain this clearly without implying that either benchmark automatically determines the final pump price in Nigeria.
– FOB West Africa (FOBWAF): A pricing assessment associated with refined products supplied from West African loading locations on a free-on-board basis. FOB pricing generally covers the product up to loading onto the vessel, with subsequent freight, insurance and other costs accounted for separately, as applicable. It can help market participants assess regional product supply values.
– STS Lomé: A pricing assessment associated with ship-to-ship (STS) transfers around Lomé, Togo, an important regional petroleum trading and distribution hub. It reflects a different supply and delivery context from FOB cargo assessments and can provide a reference for products transferred between vessels.
Why the distinction matters for Nigeria: The benchmarks are reference points for assessing product values in different trading and delivery contexts. They are not interchangeable, and neither should be confused with the final Nigerian wholesale or retail price, which may also reflect freight, insurance, port and handling charges, storage, inland transportation, financing, taxes and marketers’ margins, as applicable.
For the story, I recommend replacing the existing benchmark paragraph with the following:
