Oil marketers in Nigeria have raised concerns over the constant reduction of fuel prices, warning that the changes are causing them significant financial losses. The Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN) has called for a more stable pricing system, suggesting that fuel prices should only be reviewed every six months.
Concerns Over Market Instability
PETROAN’s Publicity Secretary, Joseph Obele, stated that the recent downward price reviews have resulted in billions of naira in losses for fuel marketers. He warned that the unpredictability of fuel prices discourages investment in the sector and could lead to job losses and economic instability.
The latest price cut came when the Dangote Refinery reduced the cost of Premium Motor Spirit (PMS) from ₦890 per litre to ₦825 at the gantry. In response, the Nigerian National Petroleum Company Limited (NNPC) lowered its pump price to ₦860 per litre.
According to PETROAN, unstable fuel prices impact the entire economy, affecting transport costs, food prices, and the general cost of living. The association is urging regulatory authorities to enforce a six-month price review policy to create a more predictable business environment.
Push for Competition and Imports
In a shift from its previous stance, PETROAN is now advocating for fuel imports to prevent market monopolies. The association emphasised the importance of healthy competition, stating that multiple supply sources including Dangote Refinery, NNPC refineries, modular refineries, and fuel imports would create a fairer market.
Some independent importers in Lagos had been selling petrol for as high as ₦945 per litre but have now adjusted their prices to below ₦900 due to market pressures, leading to losses.
Obele stressed that Nigeria’s downstream petroleum sector faces multiple challenges, including monopolies, price fluctuations, and unfair competition. He called for better regulations that prevent market dominance by a single entity and encourage new players to enter the sector.
Call for Government Action
PETROAN commended the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and the Federal Competition and Consumer Protection Commission (FCCPC) for their efforts in promoting fair competition. However, the association urged them to remain vigilant against unfair market practices.
To ensure market stability, PETROAN suggested that the government:
- Encourage competition by allowing multiple supply sources.
- Create clear regulations to protect consumers from sudden price changes.
- Invest in infrastructure such as refineries, distribution networks, and storage facilities.
A Call for Stability
“We must work together to ensure a vibrant and competitive fuel market that benefits both consumers and industry players,” PETROAN stated. The association reaffirmed its commitment to advocating for full deregulation, fair pricing, and a stable downstream sector.
With continued discussions among industry stakeholders, the future of Nigeria’s fuel market will depend on how well the government and private players balance price stability, competition, and investment incentives.