Title: Optimisation Approach To House-Hold Kerosene Supply Chain In South-South Region Of Nigeria
Authors: Ogbereyo, S.; William-Porbeni, D.; Owei B. J.
Volume: 10
Issue: 6
Pages: 73-86
Publication Date: 2026/06/28
Abstract:
The efficient distribution of Household Kerosene (HHK) remains a major challenge in Nigeria due to increasing demand, inadequate refining infrastructure, high transportation costs, and supply chain inefficiencies. This study presents an optimization-based approach for the design and operation of a household kerosene supply chain network in the Niger Delta region of Nigeria. The objective was to determine the optimal refinery locations, production capacities, and distribution pathways that minimize the overall supply chain cost while satisfying the region's kerosene demand. Demand data obtained from the Nigerian Bureau of Statistics (NBS) were integrated into a mathematical optimization model developed using the General Algebraic Modeling System (GAMS). The study area was discretized into 41 grid cells to support spatial analysis and network configuration. Two optimization scenarios were evaluated: a demand-driven refinery siting strategy and a fixed-capacity refinery scenario of 10,000 barrels per day. Results indicated that four refinery locations were sufficient to satisfy a regional demand of approximately 4,773 barrels of kerosene per day. The optimal network configuration identified refinery locations in Delta, Rivers, and Akwa Ibom States under the demand-based scenario, while the fixed-capacity scenario produced an alternative configuration involving Delta, Bayelsa, Rivers, and Akwa Ibom States. Cost analysis revealed that production cost was the dominant contributor to total supply chain expenditure, accounting for 74% and 64% of total costs in the two cases investigated, respectively. Transportation costs represented the second-largest cost component, whereas investment costs contributed the least. The findings confirm the applicability of mathematical optimization techniques for improving petroleum product distribution networks and provide a practical decision-support framework for policymakers, investors, and industry stakeholders seeking to enhance kerosene supply security, operational efficiency, and cost-effectiveness in Nigeria.