A looming crisis in Nigeria’s fuel sector has put around 10,000 oil marketers at risk of shutting down due to a dramatic drop in fuel consumption and soaring prices. According to the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMPDRA), daily fuel consumption plummeted to just 4.5 million litres in August 2024, a staggering 92% decline from 60 million litres per day in May 2023. This sharp decrease has been attributed to rising fuel prices and product scarcity, with only 16 out of the 36 states receiving fuel from the Nigerian National Petroleum Company (NNPC) Limited during the same period.
Since President Bola Tinubu ended the petrol subsidy on his first day in office in 2023, fuel prices have skyrocketed from ₦185 to over ₦1,000 by October 2024. This continuous price surge has exacerbated the economic situation, leading to soaring costs for food and transportation and driving inflation to a three-decade high. As a result, many Nigerians have been forced to abandon their vehicles, turning to public transportation amid widespread hardship.
The national leadership of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has expressed deep concern over the impact of reduced petrol consumption on its members, many of whom are facing significant financial losses. Dr. Joseph Obele, the National Public Relations Officer of PETROAN, indicated that about 10,000 members could exit the business within 45 days due to severely impacted trading capital. He revealed that the cost of loading a truck of fuel has surged from ₦7 million to ₦47 million in just 16 months.
In response to the crisis, PETROAN has appealed to President Tinubu for a grant of ₦100 billion to help save the affected businesses from collapse. Abubakar Maigandi, President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), confirmed the downturn in consumption and higher prices, noting that members are buying less fuel than before due to economic pressures.
The Nigeria Union of Petroleum and Natural Gas Workers (PENGASSAN) has also raised alarms, stating that the inability of oil marketers to purchase products has resulted in job losses among truck drivers and petrol station workers. PENGASSAN Secretary-General Afolabi Olawale highlighted the extensive reach of this crisis, affecting workers in both formal and informal sectors, particularly in the downstream sector.
As the situation evolves, the oil marketers’ struggle underscores the broader economic challenges facing Nigeria amid rising fuel costs and product scarcity.