Empirical Study of Supplier Selection and Risk Mitigation Strategies in the Nigerian Petroleum Downstream Sector

Supplier selection in Nigeria's petroleum downstream sector involves complex trade-offs between cost, supply reliability, quality, and geopolitical risk, with supply chain disruptions carrying significant consequences for national energy security. This study empirically investigates supplier selection criteria and risk mitigation strategies across 15 petroleum product marketing companies operating in the South South and South West geopolitical zones. A mixed-methods design combines a structured survey administered to 90 procurement and supply chain managers with in-depth case studies of three companies selected for their contrasting supplier risk management approaches. Multi-criteria supplier evaluation is modelled using the Analytic Network Process (ANP), capturing interdependencies among selection criteria that AHP-based models overlook. Criteria weights derived from the expert survey are compared across firm size categories using non-parametric statistical tests. A supplier risk assessment matrix is developed from identified risk categories, probability estimates, and impact ratings. Findings indicate that supply reliability and product quality are ranked above price competitiveness as primary selection criteria among larger firms, while smaller firms prioritize price. Single-sourcing dependency is identified as the most prevalent and highest-impact supply risk, with 60 percent of sampled firms reliant on a single primary supplier for imported products. Dual-sourcing strategy adoption is associated with a 47 percent reduction in supply disruption frequency. Recommendations include mandatory supply risk disclosures in downstream regulatory reporting. Keywords: supplier selection, analytic network process, petroleum downstream, supply risk, Nigeria