Nigeria’s Downstream Sector Embraces Digital and Sustainable Transformation After Subsidy Removal

The Major Energy Marketers Association of Nigeria (MEMAN) has said that the removal of fuel subsidies has ushered in a new era of deregulation, opening up vast opportunities for innovation, private investment, and digital transformation across Nigeria’s downstream oil and gas industry.

During Nigeria’s 65th Independence Day broadcast, President Bola Tinubu described the removal of fuel subsidies as a difficult but necessary decision to rescue the economy and redirect national wealth toward improving citizens’ welfare.

Speaking at the OTL Africa Downstream Week 2025 in Lagos on Wednesday, MEMAN Chairman, Mr. Huub Stokman, said the reform has redefined the downstream market, paving the way for competitive business models such as Energy-as-a-Service (EaaS), Virtual Power Plants (VPPs), and peer-to-peer energy trading that enhance energy access and operational efficiency.

> “The downstream environment is evolving rapidly. With the Dangote Refinery now operational, dependence on imported petroleum products is declining, reshaping Nigeria’s local supply landscape,” Stokman said.

He noted that policymakers increasingly see natural gas as a key transition fuel, with rising demand for Compressed Natural Gas (CNG) and Liquefied Natural Gas (LNG) across industries.

According to Stokman, the industry is also embracing clean and digital technologies — including solar power, biofuels, and advanced monitoring systems — to drive sustainability and optimise operations.

However, he stressed that regulatory clarity and policy stability remain essential to attract new investments and sustain long-term growth.

> “Significant investment is still required in refining, storage, distribution, and low-carbon infrastructure to achieve Nigeria’s energy transition goals,” he said.

Describing Africa’s energy landscape as one of “dual realities”, Stokman highlighted the challenge of addressing energy poverty while transitioning toward cleaner, low-carbon systems.

> “Natural gas — whether LNG, LPG, or CNG — is crucial for Africa’s energy transition, offering a cleaner alternative that supports industrialisation and broad energy access,” he added.

He further noted that decentralisation and digitalisation are transforming the continent’s energy systems, with renewable technologies driving distributed power generation in underserved regions.

> “The biggest frontier remains the 600 million Africans without access to electricity — a huge opportunity for decentralised renewable energy solutions,” he said.

To secure a sustainable energy future, Stokman called for regional cooperation through cross-border gas pipelines and harmonised regulatory frameworks within ECOWAS and SADC, alongside greater investment diversification into Battery Energy Storage Systems (BESS), LPG bottling, and CNG compression facilities.

He urged downstream companies to adopt pay-as-you-go business models, establish local micro-depots, and leverage data-driven technologies to reduce costs and improve efficiency.

> “Firms must explore cross-border partnerships, strategic acquisitions, and collaborations with financiers and technology companies,” he advised.

Stokman concluded by emphasising the importance of green hydrogen, decentralised solar, and energy storage solutions as pathways to a sustainable and customer-focused energy future for Nigeria and the wider African continent.