Solving the fuel supply and distribution problem in Nigeria using a 3-node structure model

Abstract

Given that Nigeria is the largest producer of crude oil and natural gas in the world, the country struggles to make liquid fuel available to over 188 million consumers in her domestic market. A review of the key challenges impacting liquid fuel supply and distribution efficiency in Nigeria was performed. Also, measures employed by successive governments were reviewed and key reasons why the problem has been persistent despite investments by governments were highlighted in the study. However, a disruptive approach - The 3 node structure model to permanently solve the problem of liquid fuel supply and distribution is proposed in this study. Using system dynamics, factors challenging the Nigerian petroleum downstream industry were stated. Current state system dynamic loops with powerful positive and negative feedback effects to the economy of the country were captured and used as the basis for policy recommendations. More so, system dynamics has been used to show the effectiveness of the proposed 3 node structure model as it offers actionable policy frameworks for the Nigerian Government as well as business case for foreign and local investors interested in pursuing an opportunity in the Nigerian petroleum refining industry.