Rainoil Limited has called for greater investment in modular refineries and market-driven fuel pricing, arguing that diversified refining capacity and competitive pricing are critical to strengthening Nigeria’s energy security and reducing supply vulnerabilities across West Africa.

The company’s Managing Director, Emmanuel Omuojine, said excessive reliance on a single source of petroleum products could expose Nigeria’s downstream market to disruptions caused by refinery maintenance, geopolitical tensions and logistical constraints.

He advocated strategically located modular refineries closer to major demand centres, saying a more diversified refining network would improve supply resilience, encourage competition and strengthen the region’s petroleum products market.

Omuojine spoke during a high-level industry panel at the 2026 Energy Conference organised by the Association of Energy Correspondents of Nigeria (NAEC) in Lagos.

The panel examined “Market Liberalisation: Performance, Public Value and Commercial Opportunities” under the conference theme, “Access to Assets: Empowering Players and Driving Growth.”

“We don’t want a single supply that is sweet, but fragile. If there is any disruption, whether it is refinery maintenance, geopolitical tension, or logistics constraints, the whole market feels the shock immediately,” Omuojine said.

His remarks highlighted the risks associated with concentrating petroleum product supply in a limited number of facilities, even as Nigeria expands domestic refining capacity.

Modular refineries could diversify fuel supply

Omuojine argued that modular refineries could play an important role in building a more flexible downstream petroleum industry in Nigeria and neighbouring West African markets.

By locating smaller refining facilities closer to demand centres, he said, operators could improve distribution efficiency and reduce dependence on a limited number of supply sources.

A more diversified refining system could also provide alternative supply channels when larger facilities undergo maintenance or face operational challenges.

The proposal comes as Nigeria seeks to strengthen domestic refining, reduce exposure to imported petroleum products and establish a more competitive regional energy market.

However, the commercial viability of modular refineries depends on reliable crude supply, access to financing, efficient operations, adequate infrastructure and the ability to compete with larger refineries on production costs.

For investors, the central question is whether smaller facilities can secure sufficient feedstock and achieve the economies of scale required to supply products at competitive prices.

Omuojine’s argument is that a broader network of refining facilities would reduce the risks associated with excessive supply concentration and give buyers more options in the market.

Rainoil backs market-driven fuel pricing

The Rainoil managing director also called for a pricing framework based on market forces, arguing that government-administered prices could undermine investment incentives and distort competition in the downstream sector.

He maintained that producers should be able to sell at competitive prices while buyers should have the opportunity to source products from suppliers offering the best commercial terms.

“Pricing should not be fixed by the government, but should be market-driven. As a producer you want to sell at the best price, as a buyer you want the cheapest. Everyone should have the opportunity to compete,” he said.

According to Omuojine, compelling suppliers and refineries to sell petroleum products below international market parity is not a sustainable way to guarantee domestic availability.

He warned that such measures could weaken investment incentives, discourage supply and create artificial shortages if suppliers find it commercially unattractive to serve the domestic market.

“Telling suppliers to sell at below-market price is not the most effective way to guarantee supply. The market must reward efficiency,” he added.

His position reflects the broader debate over how Nigeria can balance competitive petroleum pricing with consumer affordability, supply stability and investment in domestic refining.

While market-based pricing can encourage competition and improve supply incentives, its impact on consumers depends on the level of competition, distribution costs, exchange-rate movements and the availability of alternative suppliers.

Coastal refineries and domestic supply obligations

Omuojine further argued that coastal refineries should operate under competitive, market-reflective pricing arrangements rather than being compelled to sell below prevailing market levels.

He said pricing rules should support efficient production and sustainable investment while allowing buyers to compete for available supplies.

The position underscores a key challenge for Nigeria’s downstream market: how to encourage domestic refiners to supply local consumers without undermining the commercial incentives required to sustain production and expand capacity.

For policymakers, the challenge is to establish transparent market rules that promote competition, prevent anti-competitive conduct and protect consumers without creating distortions that discourage investment.

A competitive refining market would also require reliable access to crude oil, adequate storage and transportation infrastructure, transparent trading arrangements and effective regulatory oversight.

Industry leaders examine market liberalisation

Other participants in the panel discussion included Chief Tunji Oyebanji, former chairman of the Major Energies Marketers Association of Nigeria (MEMAN); Clement Isong, Chief Executive Officer of MEMAN; and Engr Chichi Emenike, Acting Managing Director and Gas Asset Manager at Neconde Energy Limited.

Engr Emeka Ene, Chairman of Oida Energy Group, moderated the session.

The discussion focused on the commercial opportunities and challenges associated with market liberalisation, access to energy assets and the development of a more competitive petroleum industry.

For Nigeria and West Africa, the debate is increasingly centred on how to combine domestic refining investment, diversified supply sources and transparent pricing to create a resilient energy market.

Rainoil’s position is that modular refineries and market-driven pricing could help reduce supply concentration, improve competition and strengthen the commercial foundations of the downstream petroleum sector.

Achieving those outcomes, however, will depend on sustained investment, efficient infrastructure, reliable feedstock supply and regulatory policies that support competition while addressing the region’s energy security needs.