Supply Chain Disruption in Nigeria Oil and Gas Sector: Some Mitigation Strategies

Understanding the internal drivers of petroleum supply chain disruptions could provide a clue to finding lasting solution to the perennial incidence of petroleum product shortages in Nigeria. This study takes another look at petroleum supply chain disruption in Nigeria oil and gas industry by identifying the drivers of disruption and determining mitigation strategies. The study adopted survey method to randomly draw 284 supply chain executives from 38 oil and gas marketing and logistics firms in Nigeria downstream petroleum industry. Data for the study was gathered through structured questionnaire and analysed with descriptive statistics. Results show the top five drivers/causes of supply chain disruption relates to: poor quality of supply chain information, inaccurate product demand forecast, third party logistics outsourcing firms, inadequacy of critical storage infrastructure and components, and poor visibility of inventory position. From the study, major strategies for handling disruption challenges in the downstream petroleum supply chain includes: flexible supply chain, collaborative outsourcing, efficient management of petroleum products inventory, and supply chain relationship coordination. These findings suggest the need for Nigerian National Petroleum Cooperation (NNPC) to advance its supply chain management practices and possibly hands off the refining of petroleum products to private firms.