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•Say bank debts mounting, destabilising their operations
By Adewale Sanyaolu
Independent petrol marketers have warned Nigerians to brace for irregular fuel supply in the coming weeks, citing mounting bank debts that are straining their operations. According to them, the hike in petrol price has led to higher import costs amid tightening financing options.
In turn, the development is making it increasingly difficult to maintain consistent stock levels, forcing some operators to ration purchases. They stress that without immediate intervention, motorists could face longer queues and sporadic availability at filling stations nationwide.
In a telephone interview with Daily Sun, the National Public Relations Officer of Independent Petroleum Marketers Association of Nigeria (IPMAN), Mr. Chukwudi Akadike, bluntly said that consumers should brace up for an era of epileptic supply.
He added that marketers are now into heavy borrowing from banks because they now need more naira to purchase a few products. “In petroleum products trading, an increase of N10 is not a lot because it’s a volume business”, he said.
He explained that Nigeria’s downstream petroleum market is entering a more delicate phase, as the recent hike in petrol prices was beginning to choke both demand and working capital across the sector.
While pump prices he said marketers’ margins are thinning, consumption is slowing and many are struggling to raise enough cash to stay in business.
Independent marketers say the sharp increase in the cost of replenishing stock has fundamentally altered how they operate. The rising price of petrol has pushed up the naira value required to lift a single truckload, forcing some operators to pool resources simply to keep their stations supplied.
“The purchasing power is high. Now, it takes so much Naira to be able to buy 45,000, 40,000 litres of petroleum product. The volume of money now has also increased,” Ukadike said.
According to him, the pressure is already eroding capital bases across the sector.
“Definitely, it is impacting our businesses. And most of the people are running out of capital. Even to make up this money now to buy products is going to be a little bit difficult. And some people are even combining. Just to make sure that the business is moving. And we are serving Nigerians better.”
Beyond the struggle to finance supplies, marketers are also grappling with a noticeable drop in consumption as higher prices reshape consumer behaviour. Another oil marketer, Ibrahim Gambo, told Nairametrics that demand has softened significantly since the festive season ended.
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“Yes, consumption has reduced. Demand is noticeably slower compared to December, which is usually a peak period due to festivities, travel, and increased commercial.
“With higher pump prices, consumers seem to be adjusting behaviour, less discretionary travel, more fuel conservation and in some cases switching to alternatives like CNG where available.”
He added that commercial transport operators, a major driver of petrol demand, are also cutting back. “Commercial operators are also cutting trips to manage costs. So, volumes in January and beyond are softer than what we saw in December.”
The pressure on marketers comes against a backdrop of renewed volatility in the global oil market. Crude oil prices have climbed to around the $70 per barrel mark, driven largely by escalating geopolitical tensions, including renewed threats of US military action against Iran. Analysts say fears of supply disruptions, combined with restrictions on Russian oil and steady Chinese demand, could keep prices elevated even as the year began with expectations of oversupply.
For Nigeria’s downstream sector, this has direct implications. Marketers have warned that pump prices of both imported and locally refined petrol could climb as high as N1,000 per litre if crude prices continue to rise and other cost pressures persist.
Already, prices have adjusted sharply. Dangote Petroleum Refinery recently raised its gantry price of petrol from N699 per litre to N799 per litre. Following the change, the refinery announced that MRS Oil Nigeria Plc stations supplied by it would now sell petrol at N839 per litre, effectively ending the temporary price support introduced during the festive season. Shortly after, the Nigerian National Petroleum Company (NNPC) Limited adjusted its pump prices to N839 per litre in Abuja and N835 per litre in Lagos.
While the naira has shown some signs of strengthening in recent weeks, marketers insist that foreign exchange stability alone is not enough to ease pump prices. Gambo explained that petrol pricing reflects a complex mix of factors.
“While the exchange rate has shown some improvement, petrol pricing is influenced by several other factors beyond FX,” he said. “First, most petrol cargoes currently in the market were imported when the exchange rate was much weaker, so marketers are still recovering higher landing costs.”
He listed other pressures, including global crude and refined product prices, logistics and financing costs. “Second, global crude oil prices and refined product prices have remained volatile, which directly affects landing costs. Third, logistics expenses, shipping, insurance, port charges, financing costs, and inland distribution, have increased significantly. Energy costs, security risks, and interest rates also play a role. So, even with some FX stability, the overall cost structure has not reduced enough to immediately reflect in pump prices.”
Ukadike has also linked the recent increases directly to crude oil’s rise from the $50–$60 range to around $70 per barrel, stressing that in a deregulated market, the government no longer fixes petrol prices.
On its part, Dangote Petroleum Refinery said its latest adjustment represents a return to “sustainable pricing levels” after absorbing higher costs during the festive period to ease the burden on households. The refinery said it can supply up to 75 million litres of petrol daily, well above Nigeria’s estimated consumption of 50 million litres.
Ironically, while higher crude prices are squeezing marketers and consumers, they could benefit government finances. Oil trading above Nigeria’s 2026 budget benchmark of $64.85 per barrel is expected to boost fiscal revenues, strengthen foreign exchange reserves and support exchange rate stability, highlighting the complex trade-offs now shaping Nigeria’s fuel market.
