KEY POINTS
- Marketers say higher petrol prices have depleted their capital, making it hard to buy and restock fuel.
- Fuel consumption has dropped as consumers cut travel, conserve fuel, and seek alternatives.
- Rising global crude prices and high logistics costs are expected to keep pump prices under pressure.
Oil marketers across Nigeria say the recent surge in petrol pump prices is squeezing their businesses, making it increasingly difficult to raise enough capital to purchase products from depots.
The marketers disclosed that the higher cost of petrol has eroded their purchasing power, forcing many operators to exhaust their working capital, while some now pool resources just to restock their stations.
Speaking exclusively to Nairametrics, the National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Chinedu Ukadike, said buying a truckload of petrol now requires significantly more money than before.
According to him, it now takes far more naira to procure 40,000 or 45,000 litres of petrol, a development that is directly affecting business operations.
“Most marketers are running out of capital. Even raising enough money to buy products has become difficult. Some marketers are combining resources just to ensure the business continues and Nigerians are served,” Ukadike said.
Another marketer, Ibrahim Gambo, noted that fuel consumption has dropped sharply as consumers adjust their spending patterns following the price hike.
He explained that demand in January and beyond has been softer compared to December, traditionally a peak period driven by festive travel and increased commercial activity.
“With higher pump prices, people are travelling less, conserving fuel more, and in some cases switching to alternatives like CNG where available. Commercial operators are also reducing trips to manage costs,” Gambo said.
Marketers Warn that Petrol Price May Face Upward Pressure
Market watchers warn that petrol prices may face further upward pressure as global crude oil prices hover around $70 per barrel, driven largely by rising geopolitical tensions, including threats of military action involving the United States and Iran.
Analysts project that oil prices could remain elevated due to geopolitical risks, restrictions on Russian oil, and strong Chinese demand, even as global markets had initially expected oversupply.
Marketers have cautioned that, if current trends persist, petrol prices, whether imported or locally refined, could climb towards N1,000 per litre.
Last week, Dangote Petroleum Refinery increased its gantry price of petrol from N699 per litre to N799 per litre. Following this adjustment, MRS Oil Nigeria Plc stations supplied by the refinery now sell at N839 per litre.
The Nigerian National Petroleum Company (NNPC) Limited also raised its pump prices to N839 per litre in Abuja and N835 per litre in Lagos.
Gambo added that recent improvements in the naira’s exchange rate have not translated into cheaper petrol, as pricing is influenced by multiple cost components beyond foreign exchange.
“Many cargoes in the market were imported when the naira was weaker. In addition, global product prices, shipping, insurance, port charges, financing costs, security risks, and high interest rates continue to push up landing costs,” he said.
Ukadike also attributed the price increase to the jump in crude oil prices from around $50–$60 per barrel to about $70 per barrel, stressing that in a deregulated downstream market, government does not fix fuel prices.
Meanwhile, Dangote Refinery said its latest price adjustment reflects a return to sustainable pricing levels after absorbing higher costs during the festive season to ease the burden on consumers.
The refinery added that it can supply up to 75 million litres of petrol daily, exceeding Nigeria’s estimated daily consumption of 50 million litres.
On the fiscal side, analysts note that crude prices above Nigeria’s 2026 budget benchmark of $64.85 per barrel could boost government revenue, strengthen foreign exchange reserves, and support exchange rate stability.
