Marketers threaten shutdown if government fixes petrol prices
Independent oil marketers threaten nationwide shutdown if government imposes price controls in Nigeria's deregulated fuel market.
Nigeria’s downstream petroleum sector is heading for another showdown. Independent fuel marketers have pushed back against the Federal Government’s demand for a cut in pump prices. They have threatened to shut down filling stations nationwide if the government imposes price controls despite the country’s deregulated fuel market.
The warning followed recent comments by the Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, that government agencies would not tolerate profiteering even though petrol pricing had been liberalised. The National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Chinedu Ukadike, said any attempt to impose price controls would violate the principles of deregulation and force marketers to suspend operations. “You cannot operate a deregulated market and at the same time dictate the price marketers should sell their products without considering the cost of purchase,” Ukadike said.
Marketers are not exploiting Nigerians, Ukadike argued. They are grappling with mounting financial losses arising from frequent downward adjustments in depot prices, particularly by the Dangote Refinery. Many marketers purchase products at higher rates with bank financing, only for depot prices to decline before their existing stock is exhausted. The situation leaves them to absorb significant losses. Ukadike said the Petroleum Industry Act (PIA) provides for a market-driven pricing system. He warned that government interference would discourage investment and undermine confidence in the downstream sector.
The National President of the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN), Billy Gillis-Harry, adopted a more conciliatory position. He said the minister had the authority to intervene in the interest of consumers but should first engage stakeholders. He called for an emergency meeting involving the Federal Government, regulators, refiners and marketers.
The disagreement comes amid increasing public pressure for lower petrol prices after international crude oil prices retreated from recent highs. Despite the decline, pump prices in Nigeria have remained largely unchanged, prompting concerns among consumers and labour groups. The Federal Competition and Consumer Protection Commission (FCCPC) has also questioned why reductions in global crude oil prices had not translated into significant cuts in petrol pump prices. Petrol currently sells for between ₦1,140 and ₦1,210 per litre across different parts of the country.
The winners: marketers who protect their margins. The losers: Nigerian consumers who continue to pay high prices while global crude prices fall. And perhaps the government, which faces a choice between deregulation and public pressure.
Bottom Line: Deregulation means prices can go up. It also means prices can come down. Nigerian consumers are still waiting for the second part.