Oil Marketers Face Losses Due to Unstable Petrol Prices
The President of PETROAN, Billy Gilly-Harris, revealed that fluctuating petrol prices have significantly affected oil marketers. He explained that members of the association struggle to recover their costs because petrol prices drop unexpectedly after they purchase fuel at a higher rate.
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“In our weekly reviews, we discovered that the size of the loss and the possibility of most of us going out of business is glaring at us,” Gilly-Harris said.
He added that oil marketers are committed to ensuring Nigerians have access to affordable fuel, but they also need to stay profitable. According to him, the sudden reduction in prices makes it difficult for them to manage their investments and sustain their businesses.
NNPC and Dangote Refinery Trigger Price War
The ongoing price war between the Nigerian National Petroleum Company (NNPC) Limited and Dangote Petroleum Refinery has worsened the situation for oil marketers.
On February 26, 2025, Dangote Petroleum Refinery reduced the ex-depot price of petrol from ₦890 to ₦825 per litre. The company said the decision was meant to ease financial pressure on Nigerians, especially with the upcoming Ramadan season.
In response, NNPC also lowered petrol prices at its outlets across the country, citing market forces as the reason. The Group Chief Corporate Communications Officer of NNPC, Olufemi Soneye, stated that these price changes are a normal response to shifts in the market.
However, oil marketers believe these frequent reductions, without proper regulation, could push them out of business.
Oil Marketers Demand Regulatory Action
Oil marketers have called on the NMDPRA and FCCPC to intervene and ensure price stability in the petroleum sector. PETROAN argues that sudden price reductions should be reviewed to prevent unfair competition that could drive small businesses out of the market.
Gilly-Harris stated that while oil marketers have the capacity to import petrol or buy from local refineries, price fluctuations make it difficult to plan their business operations. He urged regulators to work with industry stakeholders to establish a stable pricing mechanism.
“We see that prices consistently shift up or down, and there is no clear business consultation on how this should be done. That is why we said the NMDPRA and the consumer protection agency should swing into action and work with other stakeholders,” he said.
Concerns Over Monopoly in the Downstream Sector
Oil marketers have also expressed fears that the growing price war could lead to a monopoly in the downstream petroleum sector. They argue that if smaller marketers are forced out of business, the market will be controlled by only a few players, leading to unfair pricing in the long run.
PETROAN spokesman, Joseph Obele, warned that monopolies and unfair competition could harm the sector. He urged regulatory bodies to promote healthy competition and ensure multiple supply sources, including Dangote Refinery, NNPC refineries, modular refineries, and fuel imports.
He stressed that Nigeria needs a competitive market where different players can operate profitably without unfair price manipulation.
What This Means for Consumers
For consumers, the reduction in petrol prices may seem like a positive development. However, oil marketers argue that if businesses continue to collapse due to unstable pricing, the long-term effect could be a limited supply of fuel and higher prices in the future.
Industry experts warn that while price reductions may offer temporary relief, the government must ensure that competition remains fair and sustainable.
Oil marketers are facing financial difficulties due to frequent reductions in petrol prices. They have urged the FCCPC and NMDPRA to regulate price adjustments to prevent business losses. The ongoing price war between NNPC and Dangote Refinery has intensified the crisis, putting small oil marketers at risk.
As the petroleum sector navigates these challenges, stakeholders must find a balance between making petrol affordable for Nigerians and ensuring that businesses remain profitable. The role of regulators in maintaining market stability has never been more critical.
Emmanuel Ochayi
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