The Major Energies Marketers Association of Nigeria (MEMAN) has said downstream operators are under immense pressure due to the global oil crisis, despite the opportunities the situation presents.
MEMAN disclosed this during a webinar convened on Wednesday.
According to the News Agency of Nigeria(NAN), the forum, hosted by MEMAN with S&P Global Energy, examined the Middle East tensions, supply security risks, and Nigeria’s transition to a deregulated downstream regime.
What they are saying
MEMAN noted that West Africa’s downstream petroleum sector is proving resilient despite escalating geopolitical tensions.
MEMAN Chairman, Huub Stokman, described the crisis as a “double-edged reality” shaping opportunities for producers while intensifying pressure on downstream operators and consumers.
- “While it creates opportunities for producers, it exerts immense pressure on downstream operators and, ultimately, consumers,” Stokman said.
He noted rising volatility, surging shipping and insurance costs, and rapid shifts in sourcing as countries scramble to secure alternative crude supplies.
More insights
According to him, Nigeria stands at a strategic crossroads, with the potential to emerge as a reliable global energy partner if structural bottlenecks are addressed decisively.
- He cited pipeline insecurity, regulatory opacity, and infrastructure deficits as key constraints limiting Nigeria’s ability to fully capitalise on current market dynamics.
- He highlighted domestic refining growth, especially the Dangote Refinery, as a buffer against shocks, though warning of risks linked to supply concentration.
Despite improvements, Stokman said domestic fuel prices remain tied to global trends, with adjustment delays often driven by inventory cycles and working capital pressures.
He disclosed that Nigeria maintains over 30 days of petrol supply, with NNPC Ltd. continuing to act as supplier of last resort.
Global impact
From a global perspective, S&P Global’s Gary Clark warned that refined product markets are tightening amid rising margins for diesel and jet fuel.
- Clark attributed the surge to supply disruptions and heightened risk premiums, alongside costly vessel diversions around the Cape of Good Hope.
- He said these detours are tightening supply further and inflating freight costs, particularly across European markets already under strain.
On his part, Stanislas Drochon warned that Sub-Saharan Africa remains highly vulnerable due to import dependence, weak refining capacity, and limited storage infrastructure.
“Energy security is not just about supply. It is about reliability, affordability, and accessibility, requiring sustained investment across the entire value chain,” Drochon said.
According to the speakers, the global oil market remains fragile, with disruptions to Iranian output and threats around the Strait of Hormuz unsettling supply chains and pricing stability.
Participants agreed that while short-term volatility is inevitable, Nigeria’s reforms could transform uncertainty into long-term stability and growth.
What you should know
Oil marketers have said their businesses are suffering due to the spike in the pump price of petrol as a result of the ongoing conflict in the Middle East.
They lamented that they now require a much larger financial outlay to purchase a truckload of petroleum products, with very low returns that may be inadequate to cover the high interest rates on loans obtained from banks.
They said that demand for petroleum products by their customers has dropped drastically, as some of those who used to buy 20,000 litres or 10,000 litres now buy about 2,000 or 1,000 litres.
Industry players say the rising cost of petrol has significantly reduced demand, as many consumers are cutting back on purchases due to high prices.
