Petroleum product marketers are concerned that the instability in petrol prices may result in inconsistent fuel supply across filling stations. Despite there being enough supply from local refineries, such as the Dangote Refinery and the Nigerian National Petroleum Corporation (NNPC), many filling station owners are hesitant to purchase fuel due to frequent price changes. The unpredictability of prices, driven by market shifts since the full deregulation of the petroleum sector in 2024, is causing financial instability for marketers, who fear losing billions when prices suddenly drop.
The rise in the cost of crude oil has contributed to the recent price increases, with petrol now costing between N960 and N1,000 per litre in some major cities. Small marketers are especially vulnerable to financial losses, as even large purchases, such as a N50 million truck of petrol, yield minimal profit. Marketers have voiced concerns about collateral losses from loans and are avoiding stocking fuel to prevent further financial strain. Some are even contemplating importing petrol from other countries, as local prices are currently higher than the importation costs.
Despite these challenges, the head of the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN) emphasized that the focus should remain on strengthening local refining capabilities rather than relying on imports. He called on the government to provide financial support through single-digit interest loans to help sustain smaller players in the market, ensuring job preservation and growth in the local economy. However, marketers remain cautious about the risks tied to price fluctuations, fearing that the situation may lead to an inconsistent fuel supply, particularly in rural areas.
Source: PUNCH