Future of Outsourcing in the Era of Increased Petroleum Pricing in Nigeria: A Narrative Review.

Abstract

This study examines the future of outsourcing in Nigeria's petroleum industry amidst rising petroleum prices, focusing on impacts, challenges, and potential solutions. With outsourcing being a critical strategy for optimizing costs and enhancing efficiency, the rising cost of petroleum presents significant challenges for the industry. The review synthesizes literature and reports to understand how increased petroleum prices drive up production costs, compelling businesses to seek cost-effective outsourcing solutions, often at the expense of service quality. The study highlights the resultant operational inefficiencies and risks associated with partnering with cheaper offshore firms, which compromise the overall performance of outsourcing endeavours in Nigeria. The review identifies key challenges faced by Nigerian companies in the outsourcing domain, including inadequate technology, mismatched service quality, and increased logistics costs. The study suggests several strategic solutions, such as full outsourcing to well-capitalized service providers, implementing just-in-time concepts, improving payment durations, and establishing sustainable communication channels. These recommendations aim to mitigate the adverse effects of rising petroleum prices on outsourcing while enhancing operational efficiency and ensuring high service quality. By adopting these strategies, the Nigerian petroleum industry can better manage transaction costs and risks, ultimately contributing to broader economic stability and growth in the country.