Petroleum product marketers have expressed fears that the instability in the prices of Premium Motor Spirits (petrol) may lead to an epileptic PMS supply in filling stations.
The marketers noted that though fuel scarcity may not exist due to local refining capacity, filling station owners are now hesitant to lift the products from depots.
In an interview with our correspondent, the National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria, Chinedu Ukadike, emphasised that the traders lose billions of naira whenever the prices of petroleum products like PMS and diesel are reduced.
He recalled that the Dangote refinery entered the market in early 2024 and crashed the price of diesel, forcing marketers to sell below their cost of purchase and running into huge debts.
Following the full deregulation of the downstream petroleum sector by the Federal Government, the Dangote refinery and the NNPC have changed the prices of PMS multiple times between September 2024 and January 2025, affecting price stability and the cost of purchase.
Ukadike disclosed that the business of running a filling station has become more risky due to what he called the price scare.
According to him, there is enough supply of petrol at the Dangote refinery and the depots of the Nigerian National Petroleum Company Limited but many filling stations are scared of buying it due to the sudden price change.
“Everybody is trying to be very careful. It’s not that there is no product. There is availability of the product. But the price scare is what everybody is very careful about. Sometimes, when the price goes down you see people losing billions of naira. So, everybody is being cautious,” Ukadike explained.
When he was reminded that an increase in price means more profits for the marketers as they quickly adjust to the new price unlike if the price goes down, Ukadike disagreed.
According to him, the only reason for raising the price is to meet the new market price and not to make excess profits.
“I want you to remember that when the price goes up, the marketers add more money which is not profit.”
They add money to be able to continue to purchase the product. I want you to understand that it’s not profit because if the price goes up and you sell at your old price, you will not be able to have anything again. You won’t be able to back up,” he clarified.
The IPMAN spokesperson maintained that marketers are scared of lifting fuels in order to avoid collateral losses, having secured loans from the banks.
“That is why marketers fear lifting fuel because of the price scare. They will not want to suffer collateral losses.
“Remember that when the Dangote refinery came in, it was reducing prices and marketers were losing money. Did anybody tell marketers not to sell again or that they are going to repay them the money lost? Nobody said so and nobody will say so,” he stressed.
He said marketers were left alone with their losses as they resorted to selling cheaper than they acquired their products.
“It’s like having to sell off because the monetary value of what you have and the interest rate of that will not be able to keep you up. The interest rate is going up faster now,” he noted.
Speaking about the huge financial resources the business involved, he disclosed that small players in the sectors are already exiting for the big gladiators.
Ukadike expressed worries that the profit margin on a N50m truck is not N300,000, wondering how a marketer could survive in such a business.
“The business is becoming something else. Very soon, it will be left for the big gladiators. The volume of funds is huge. It’s not something somebody will just toy with. 45,000 litres of the same product is very close to N50m to purchase. Your gain is not even up to the value of what you invest in the business. I keep telling people, sometimes we might not make up to N300,000 from a business we spent N50m on,” he enunciated.
Asked if this could lead to fuel scarcity, he replied that there could only be epileptic fuel supply.
“There won’t be scarcity as long as domestic refining continues. But there would be epileptic supply as a result of the price scare,” he said.
It was noted that the epileptic supply may slightly affect fuel availability and affordability in some areas, especially in rural communities.
Meanwhile, The PUNCH reports that some marketers are already contemplating dumping the Dangote refinery to import PMS from other countries as the landing cost is now N922/litre.
As of Monday, the NNPC sells PMS at N960 per litre while the Dangote refinery sells through MRS, Ardova and Heyden at N970/litre.
Last Sunday, the Dangote Petroleum Refinery said the rise in petrol price from N899.50 was due to an increase in the cost of crude oil, the major component for refined petroleum products.
The prices offered by Dangote and NNPC are higher than the prices of the PMS imported into the country.
As of Monday, the price of a litre of petrol ranges between N960 and N1,000 in different filling stations in Lagos and Abuja.
Speaking on the plans of some marketers to import PMS because it is relatively cheaper than buying locally, the National President of the Petroleum Products Retail Outlet Owners Association of Nigeria, Billy Gillis-Harry, said the association had decided to stop fuel importation to boost local refining capacity.
He told our correspondent that PETROAN told the companies that were meant to import petrol for its members to rather build a refinery.
“The reality is that it depends on the transaction that you want to do. We had companies that were willing to import for us and it was cheaper.
“But we also look at the local values. And that’s why we agreed to stop imports completely. Like I said, it’s a deregulated economy. And so the rules of the Petroleum Industry Act and deregulation will hold sway.
“But there is also the side of patriotism. There’s also the side of growing the local economy. So, you can’t be importing products that are 100 per cent made from another country with different kinds of labour. What are the quality and the specs of that particular product? So those are questions that will come up,” Gillis-Harry remarked.
He called on the government to support retail outlet owners with single-digit interest loans in order to prevent job losses.
