The need to build a resilient petroleum supply system has prompted the Managing Director of Rainoil Limited, Emmanuel Omuojine, to advocate the development of modular refineries across Nigeria, warning that excessive dependence on a single source of fuel supply could leave the market vulnerable to disruptions.
Speaking during a panel discussion at the recent NAEC energy conference in Lagos, Omuojine said strategically located modular refineries could strengthen domestic fuel availability, encourage competition and reduce the risks associated with supply interruptions.
The conference brought together industry stakeholders to examine market liberalisation, sector performance, public value and emerging commercial opportunities in the energy industry.
Describing dependence on a single supply source as potentially fragile, the Rainoil chief executive cautioned that disruptions arising from refinery maintenance, geopolitical tensions or logistical challenges could quickly affect the entire market.
“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,” he said.
Omuojine maintained that the future of refining in Nigeria and other West African countries depended partly on developing modular refineries close to major demand centres. According to him, such facilities could diversify supply channels, improve distribution efficiency and promote competition in the downstream petroleum sector.
Beyond infrastructure development, he called for a pricing framework driven by market forces, arguing that sustained government control of petroleum product prices could undermine competition and discourage investment.
“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 stated.
He explained that efforts to compel suppliers and refineries to sell petroleum products below international market parity in the interest of domestic consumers could create distortions in the market. Such measures, he argued, could weaken investment incentives and contribute to artificial scarcity rather than guarantee uninterrupted supply.
Addressing the challenge of securing crude oil for domestic refining, Omuojine also urged that coastal refineries be allowed to purchase locally produced crude at competitive, market-reflective prices. He maintained that requiring refiners to sell their finished products below prevailing market rates could undermine the commercial viability of their operations.
“Telling suppliers to sell at below-market price is not the most effective way to guarantee supply. The market must reward efficiency,” he added.
The discussion, held under the theme ‘Access to Assets: Empowering Players and Driving Growth’, focused on how improved access to industry assets and a competitive operating environment could support growth across Nigeria’s energy sector.