•Gains remain fragile without reforms, shareholders warn
With the 26.2 per cent year-to-date (YTD) gain, oil and gas has ranked as the best-performing index on the Nigerian exchange so far this year.

But shareholders have stressed the need for industry regulators to intensify efforts at mitigating factors responsible for the sub-optimal performance of the sector.

They noted that the gains so far remained fragile until a radical market reform was implemented.

The rally represents a sharp reversal for a sector that ranked as the worst-performing index on the NGX last year.

From 2020 to 2023, the NGX oil and gas index soared by as much as 752 per cent, outperforming the broader market. In 2024, the sector posted gains of between 160 per cent and 170 per cent.

Last year, while the other five indices: banking, insurance, consumer goods, industrial goods and all-share index soared by 39.3 per cent, 73.8 per cent, 128.9 per cent and 59.2 per cent and 50.9 per cent respectively, oil and gas declined by -1.1 per cent, emerging as the worst performers.

Surprisingly, as at the close of trading on February 10, 2026, the sector dominated in performance and had returned 26.18 per cent gain to shareholders, making it the best performing so far. The banking index trailed with 10.8 per cent.

The ASI index returned a 10.36 per cent gain to investors while the industrial index appreciated by 9.15 per cent. The consumer index gained 5.28 per cent as the banking index advanced by3.3 per cent.

Investors noted that the recent rebound is being supported by firmer global crude oil prices, improved earnings prospects and the positive impact of foreign exchange reforms, which have strengthened naira-denominated assets.

The full deregulation of the downstream market has also improved margin visibility and reduced market risk, encouraging renewed investor participation in the sector.

Despite the improved sentiment and performance, the shareholders argued that sustaining the oil and gas gain would depend on deepening reforms and addressing lingering structural issues that previously dragged the sector to the bottom.

They identified operational discipline, policy consistency and stronger security architecture as critical to sustaining the positive momentum in the oil and gas sector.

The investors also warned that without consistent policy execution, enhanced security in oil-producing areas and a more predictable operating environment, the recent gains could prove fragile.

On the performance, President of the New Dimension Shareholders Association of Nigeria, Patrick Ajudua, said the uptrend could only be maintained with improved upstream performance alongside a relative recovery in the downstream market.

He stressed the importance of moderating capital expenditure, optimising costs and strengthening security across operational areas to ensure accurate product delivery and higher production volumes.

Ajudua also added that effective operational control, adequate security, improved volume delivery, resilient cash flows and strict cost management are essential to sustaining growth in the sector and driving long-term value creation for stakeholders.

Also speaking, Team Lead, Finance Research Department at InvestingPort, Uwem Olubummo, noted that sustaining the current uptrend in the oil and gas index throughout the year would require policy consistency, operational efficiency and sustained investor confidence.

She said there is a need to deepen energy sector reforms, particularly in pricing, deregulation and fiscal stability, while improving crude oil production and security to stabilise output.

Olubummo said transparency and consistency in regulatory frameworks remain crucial, alongside corporate discipline in cost management, earnings growth and efficient capital allocation to sustain dividend payout.