As nationwide fuel consumption dips sharply due to surging prices, oil marketers are sounding the alarm over severe losses, with around 10,000 dealers at risk of closure.
According to data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority, daily fuel consumption dropped to 4.5 million liters in August 2024, a staggering 92 percent decrease from the 60 million litres per day recorded in May 2023.
The data also indicate that only 16 out of Nigeria’s 36 states received fuel from the Nigerian National Petroleum Company Limited (NNPC) in August, leading to widespread shortages.
Following President Bola Tinubu’s removal of the fuel subsidy in May 2023, petrol prices have surged by nearly 488 percent, rising from N175 per litre to over N1,000 by October 2024.
This continuous price hike has strained the economy, raising transport costs, fuelling inflation, and causing hardship for Nigerians, with many abandoning their vehicles for public transportation due to prohibitive costs.
The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has reported huge losses among its members due to this drop in fuel consumption, with about 10,000 members on the brink of closure.
“The cost of a truckload of PMS has risen from N7 million to N47 million in just 16 months,” said PETROAN National Public Relations Officer, Dr. Joseph Obele. “Three days ago, during a meeting at our national headquarters, we found that around 10,000 members may exit the business within the next 45 days, as their trading capital has been severely depleted,” Obele stated.
He added that these affected marketers employ around one million people. “That’s why we wrote to the President on October 21, requesting a N100 billion grant to prevent these closures.”
President of the Independent Petroleum Marketers Association of Nigeria, Abubakar Maigandi, confirmed the decline in fuel consumption, noting that his members are also struggling.
“There is a drop in consumption, and truckload prices have gone up. We’ve had to reduce our purchases—those who used to buy ten trucks now only buy eight. We just don’t have enough fuel,” Maigandi said. “We’re selling only what little we can obtain.”
The Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) has reported job losses among truck drivers and petrol station workers as oil marketers cut back on fuel purchases.
“The economy is tough,” said NUPENG Secretary-General Mr. Afolabi Olawale. “Many station owners can’t even afford a single truckload, and this impacts our members. Truck drivers don’t get loads to haul, petrol stations are shutting down, and our members are losing jobs.”
Asked to provide specific numbers, Olawale stated, “This is an evolving situation, so I can’t give exact figures now. Both the informal and formal sectors are affected. However, those in the downstream are hit hardest, as it directly impacts truck drivers, station workers, and marketers’ representatives at depots.”
Obele also noted that the high fuel prices have curtailed cross-border fuel racketeering.