Stakeholders and experts in Nigeria’s oil industry, yesterday discussed Nigeria’s downstream sector, noting that there was the need for stability, especially on the back of the recent deregulation of the sector in line with the Petroleum Industry Act (PIA).
In her opening remarks at a media roundtable on Nigeria’s downstream sector organised by Extractive 360 in Abuja, the Executive Director of the organisation, Juliet Ukanwosu, stressed that the downstream sector remains a vital pillar of Nigeria’s oil and gas industry.
Ukanwosu noted that this is because it directly influences the availability, pricing, and distribution of petroleum products, as well as impacting the daily lives of citizens and the broader economy.
“We have observed, in recent times, the Nigerian petroleum downstream sector is navigating a turbulent phase marked by a combination of opportunities and pressures.
“Since the removal of fuel subsidies, market forces have largely determined pump prices, triggering intense competition — often described as a price war — among operators. This has led to fluctuating product prices, sometimes creating uncertainty for both businesses and consumers.
“In addition, challenges such as high operating costs, irregular foreign exchange rates, import dependency for refined products, and infrastructural bottlenecks have added strain to the sector,” she added.
The executive director pointed out that on the positive side, the liberalisation policy has opened space for more private sector participation, investment in storage and distribution infrastructure, and conversations around refining capacity expansion.
Overall, she stated that the sector was in a state of adjustment, seeking stability and competitiveness amid shifting regulations, volatile market dynamics, and evolving public expectations.
According to her, the session was designed to provide some clarity and new insights which can be used to enlighten the general public, with experts that will provide context, trends, and current realities.
In her presentation, a legal expert, Olasubomi Chuku, highlighted threats to competitive markets, including monopolies, unstable regulatory environments as well as market ambiguities and poor consumer protection.
Despite the enactment of the PIA, she argued that the market is still fairly closed as the licensing process is not open to interrogation through the Freedom of Information (FOI) Act, plus the issue of rejected or delayed approvals to independent players, while petroleum processing is still largely run by the government.
She underlined the near or emerging monopoly in refinery and weak price competition due to limited participants as well as collusion among dominant market participants for price fixing and hoarding, saying that these remain threats to a competitive market and price competition.
She therefore urged journalists to demand transparency during licensing rounds, monitor and publish prices across petroleum products and states and establish a formal process of interaction with regulators and the legislature to track accountability.
Besides, Chuku urged the media to expose anti-competitive practices and celebrate competitive measures as well as educate the public on the benefits of competition in the oil and gas industry.
In his intervention, an Oil and Gas Governance Consultant, Ademola Adigun, who gave an overview of the industry, highlighted the need to ensure a level playing field in the downstream sector.
Adigun argued that when the sector is driven by fair competition, it makes for a healthy market, and ensuring an investment-friendly environment.
He said: “The petroleum downstream market should be driven by competition, and the competition must be fair and well regulated by its regulators to provide the benefits to the consumers.”
Emmanuel Addeh @ThisDay
