The Major Energies Marketers Association of Nigeria (MEMAN) has opposed the Federal Government’s proposed ₦1,350-per-litre ceiling on petrol costs, warning that arbitrary price limits could distort competition without addressing the underlying challenges in the downstream petroleum market.
The association instead called for transparent, market-driven pricing, more efficient product distribution and measures to reduce operating costs, arguing that sustainable price stability depends on improving supply chains rather than imposing government-determined limits.
MEMAN stated its position during its third-quarter press engagement, held virtually on Thursday in partnership with S&P Global Energy. The association maintained that government-imposed price caps were not the solution to the challenges confronting petroleum product supply and distribution in Nigeria.
“Government arbitrary price caps are not the solution to petroleum market challenges,” the association said, adding that the focus should be on “transparent, market-driven pricing, efficient distribution and measures that address supply bottlenecks and reduce operating costs”.
The position comes after the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, disclosed that the Federal Government was negotiating a ₦1,350-per-litre ceiling on petrol’s ex-gantry or landing cost. Under the proposed arrangement, refiners and importers would initially absorb costs exceeding the ceiling and recover the shortfall when market conditions improved.
Oyedele said the arrangement, which would be reviewed monthly, was intended to moderate price fluctuations rather than restore the petrol subsidy removed in May 2023.
“We are introducing price modulation. The government is negotiating a ceiling of ₦1,350 per litre on the ex-gantry or landing cost of petrol to keep the price stable.
“When costs rise above the ceiling, refineries and importers will carry the shortfall and recover it later. This is neither a subsidy nor price control,” he said.
The proposal followed rising petrol prices linked to disruptions in international oil markets, increasing pressure on households and businesses. The Federal Government also announced a 30-day petrol discount at Nigerian National Petroleum Company Limited filling stations, with priority for public transport operators, as part of efforts to cushion the impact of higher fuel costs.
For downstream operators, the proposed ceiling raises questions about how refiners and importers would finance any shortfall, the conditions governing reimbursement and the potential effect on product supply if recovery arrangements were delayed or remained uncertain.
MEMAN called for clearer bulk supply arrangements that define product access, pricing, delivery schedules and contractual obligations. It also urged improvements in inventory visibility, storage capacity, transport coordination and contingency planning to strengthen the reliability of petroleum product distribution.
The association argued that a properly structured market should encourage competition, improve supply security and deliver better outcomes for consumers without relying on government-imposed price controls or broad-based fuel subsidies. It also advocated non-discriminatory access to petroleum products and more efficient regulatory processes.
MEMAN commended the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) for progress in promoting product quality, digitalising licensing, publishing market data and advancing measures intended to support fair competition. It stressed the importance of enforcing quality standards, ensuring accurate measurement and guaranteeing that customers receive the quantities for which they pay.
The engagement also examined developments in global and West African refined petroleum markets. S&P Global Energy highlighted how geopolitical tensions, refining disruptions and shifting supply patterns had contributed to price volatility, particularly in middle distillates such as automotive gas oil (AGO) and aviation fuel.
The presentations identified the Free on Board (FOB) West Africa and STS Lomé assessments as reference points for domestically supplied and imported refined products, respectively. Participants emphasised the need for greater transparency, reliable market data and wider industry adoption to support a credible regional pricing benchmark.
MEMAN also called for domestic refinery output to be prioritised, with imports retained as a means of bridging supply gaps and responding to disruptions. Such an approach would require reliable production, transparent pricing and effective coordination between refiners, importers, depot operators and marketers.
The disagreement over the proposed ₦1,350-per-litre ceiling reflects a wider challenge for Nigeria’s deregulated downstream sector: balancing consumer protection against the commercial realities of sourcing, refining, importing, storing and distributing petroleum products.
While a ceiling on ex-gantry or landing costs could help moderate sharp price increases, its effectiveness will depend on how the mechanism is implemented, how excess costs are recovered and whether suppliers can continue delivering products without accumulating unsustainable losses.
MEMAN’s position is that lasting improvements will depend on predictable pricing arrangements, competitive supply, efficient logistics and reduced operating costs. For the industry, the central question is whether the proposed price modulation mechanism can deliver greater price stability without undermining supply security or the commercial viability of downstream operations.