Innovation and Nigeria’s Downstream Petroleum Supply Challenges
In a country where off grid power supply to homes through gas, diesel, and petrol generators accounts for as high as 20 gigawatts of total power, innovation is needed to provide convenience and highest delivery standard. Bringing that innovation into the last mile of the downstream oil and gas supply chain is Zee Oil & Gas which is an outfit of Zee Innovative Development Limited.
The Lagos-based firm operates a permit by the Department of Petroleum Resources for the haulage of petroleum products and deploys monitoring devices across clients’ nodes - diesel tanks located in the premises of clients – to keep a tab on daily consumption and supply.
The company also tracks all its trucks in real-time as they move petroleum products from the depots to its clients. Clients which could be corporate or residential estates that own diesel storage tanks with capacity of 5000 liters and above can request for diesel supply and monitor oil usage from the convenience of bespoke app which the firms calls MobileZee.
From this vantage point, it is easier to note short-supply by fraudulent suppliers. Better still, it is easier to place order for fresh supplies to save the embarrassment of power outage in a country that is yet to make 24-hour electricity available to its teeming population.
Speaking about this innovation, Ekene Ugbebor, the Founder and Lead Innovator for Zee Oil & Gas explained, “tackling everyday challenges demands a new approach which technology provides, as a firm we are constantly in search of innovative ways to solve everyday challenges”.
“The technology deployed by our firm to monitor and gauge supply creates a loop where our clients can measure how diesel purchased to power their generators or businesses are being used. The advantages are huge.
“Among them are the assurance of highest delivery standard that nullifies the possibility of being underserved; in additions to that it provides the volume of diesel available in the clients storage tank in real time which can be accessed on the app from any in the world ”, Ugbebor added.
Across the Lekki-axis of Lagos alone, the oil and gas firm supplies diesel to close to one-third of the residential estates in the axis. The business case emerging from this strategic approach is akin to popular road-to-market tactic often deployed by firms entering new markets.
Carving out compelling competitive advantage, in a highly competitive market, will demand a strong positioning which could be had through roll out of new service or innovative product benefits.
The network of closely monitored tanks and on-demand fueling services via the smartphone avoid time-wasting trips to gas stations. This rising mastery of the petroleum downstream supply chain from depot to delivery in residential estates and corporate offices emphasise the startup narrative in Africa’s largest market.
It sounds more like invoking the enterprise ingenuity behind Amazon’s services, among which are smart doorbells operated from smartphones.
Deeper internet penetration, standing presently at 65.1 per cent as a share of the overall Nigeria population, according to statistic portal, Statista, and the availability of more affordable smartphones in the tech market have combined to incentivise digital innovations that serve as core solutions to everyday challenges across industries.
The United Nations had said in 2017 that digital innovation is key to Africa’s economic renaissance. From agriculture to financial services, startups are adapting technology to matching the dynamics of everyday challenges. Precisely, for that reason, South Africa, Kenya, Rwanda, Nigeria, Egypt, and Tunisia are fast turning into a breeding ground for inspiring digital innovation.
Apart from providing employments for a growing African youth population, the startups are providing the platform for the continent to keep pace with the EU, North America and Asia’s bourgeoning startup ecosystem.
Venture capital and philantgropic funds are pouring from every corner to support those startups ecosystem. For instance the French Development Agency’s (FDA) €65million fund aims to support African Union Agenda 2063 to eradicate the frustration encountered by young entrepreneurs striving to turn their ideas into worthwhile enterprise that could scale up to reasonable socioeconomic impact.
The opportunity to start, the incentive to continue, and the market to lap up every attempt to scale will push bright African youths into pursuing the African digital future. Considering the success of startups in California, Sweden, Qatar and Kenya, Nigerian young entrepreneurs will stop at nothing to come up with bold ideas to meet the needs of a section of the total 200 million population.
Ekene Ugbebor joins the rank of those young entrepreneurs seizing the new opportunity to deploy technological innovations in select sectors.
The founder of Zee Oil & Gas started his career at Guaranty Trust Bank IT division and later worked in FirstBank Nigeria IT department where he was a part of the IT Governance Team in those organizations. That sectoral experience serves as the foundation of deeper insights into how to turnaround businesses and scale them to max their comparative advantage.
That experience is apt to drive the downstream sector out of a rut. Although global oil demand for 2020 was expected to hit 101.5 million barrel per day, according to the IEA’s Oil Market Report released last year, the pandemic and rising switch to solar energy to power homes are proving a challenge for players in the downstream sector.
As renewable energy, for instance solar panel, becomes more affordable households in major cities are making the trade-off. To a large extent, this is a welcome development for environmental activists.
But a section of the market still finds solar energy expensive and inefficient for private economy. According to Greenmatch, a UK watchdog for the energy industry, the form of energy is awaiting potential advancement in quantum physics and nonotechnology to fully take off. Such advancement will help the industry to scale to a point where it can truly penetrate the market further. For now though, solar panel firms such as Zola, Rubitec, and PSC are strategically exploring new pricing and product-tailoring strategy to reach the middle-and-low socioeconomic class.