Evaluation Of Logistics Agility Of Petroleum Products Distribution In Nigeria: Economic And Environmental Implications

Abstract

The petroleum industry represents a significant aspect of Nigeria's economic productivity and development plans. More than 70% of energy demand in the country is derived from petroleum product and its derivatives. Agile distribution of petroleum products is a strategy towards an uninterrupted supply of products to consumers at cost effective prices and without quality compromise. It derives from a logistics process that is lean, flexible, responsive, adaptive, resilient, and cost-efficient. The study is a survey of the downstream marketing and distribution operation of refined petroleum products in Nigeria. It is based on a review of related literature and data sourced from the National Bureau of Statistics. The log-linear model reveals that variations in petroleum pump prices are significantly
driven by fluctuations in foreign exchange (FX) rates rather than global crude prices, with every 100% increase in FX resulting in a 136.7% rise in pump prices. In addition, prices of Premium Motor Spirit (PMS) and Automotive Gas Oil (AGO) strongly correlate with inflation, as reflected in the Composite Consumer Price Index (CCPI). The zonal distribution of petroleum products by road in Nigeria from 2017 to 2019, witnessed significant regional disparities in transportation volumes and associated emissions. The environmental burden from tanker trucks is highest in the South West and North Central zones. Air pollution (NOₓ, PM₁₀) and greenhouse gas emissions are directly proportional to the number of trucks in each zone. The environmental pressures resulting from petroleum product distribution by road suggest the need for targeted policy interventions to enhance agility in favor of pipeline distribution.
These dynamics underscore the need for logistics strategies that promote economic sustainability by reducing overreliance on road haulage, enhancing pipeline infrastructure, and reviving local refining capacity. The study situates logistics agility within broader sustainable development goals (SDGs), particularly SDG 7 (affordable and clean energy) and SDG 9 (industry, innovation, and infrastructure), recommending systemic reforms, infrastructure revitalization, and digital integration to optimize Nigeria's petroleum logistics chain. Ultimately, agile and sustainable logistics are not merely operational imperatives-they are national priorities for resilience, equity, and inclusive growth.