CASE STUDY IGF Guidance For Governments: Leveraging Local Content Decisions for Sustainable Development

This case study examines the challenges faced by Nigeria's state-led efforts to develop a downstream oil and gas industry, highlighting how mismanagement and political interference have prevented the country from becoming a net exporter of refined petroleum products.

• Despite possessing the world's 10th largest crude oil reserves and high domestic demand, Nigeria has failed to become a net exporter of refined products and currently derives less than 1 per cent of its national GDP from the downstream oil sector.
• The Nigerian National Petroleum Corporation (NNPC) has mismanaged state-owned refineries through opaque financial handling, where crude oil allocated for domestic refineries is often rerouted to export markets or product swaps without clear accounting rules.
• Operational failures in the refinery sector are driven by political interference, inadequate funding for aging infrastructure, a lack of experienced staff, and neglected maintenance due to spare part shortages.
• The downstream sector suffers from significant distribution losses, with 40 per cent lost to equipment failure, theft, and sabotage. In 2011, pipeline vandalism increased by 224 per cent over the previous year, resulting in 2,768 vandalism-related line breaks and losses of approximately USD 77 million.
• Fuel subsidies have undermined the sustainability of the refinery sector by preventing profits and encouraging the smuggling of petroleum products to neighboring countries, where prices could be up to 15 times higher.

APA

Toledano, P., & Maennling, N. (2018). CASE STUDY IGF Guidance For Governments: Leveraging Local Content Decisions for Sustainable Development. International Institute for Sustainable Development. https://www.iisd.org/sites/default/files/publications/case-study-nigeria-downstream-linkages.pdf

Chicago

Toledano, Perrine, and Nicolas Maennling. CASE STUDY IGF Guidance For Governments: Leveraging Local Content Decisions for Sustainable Development. International Institute for Sustainable Development, 2018. https://www.iisd.org/sites/default/files/publications/case-study-nigeria-downstream-linkages.pdf.

Wikipedia

{{cite report |last1=Toledano |first1=Perrine |last2=Maennling |first2=Nicolas |title=CASE STUDY IGF Guidance For Governments: Leveraging Local Content Decisions for Sustainable Development |publisher=International Institute for Sustainable Development |date=2018 |url=https://www.iisd.org/sites/default/files/publications/case-study-nigeria-downstream-linkages.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{toledano2018case, author = {Toledano, Perrine and Maennling, Nicolas}, title = {{CASE STUDY IGF Guidance For Governments: Leveraging Local Content Decisions for Sustainable Development}}, institution = {International Institute for Sustainable Development}, year = {2018}, url = {https://www.iisd.org/sites/default/files/publications/case-study-nigeria-downstream-linkages.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }