Oil marketers in Nigeria have raised concerns over mounting losses and declining demand as rising global crude oil prices push petrol prices higher, squeezing margins across the downstream sector.
Industry operators say the surge in pump prices, now above N1,230 per litre from an average of about N839 in recent weeks, has significantly increased the cost of doing business, forcing many marketers to rely heavily on bank loans with high interest rates.
The price increase has been linked to rising global oil prices, which have climbed above $104 per barrel amid escalating geopolitical tensions involving the United States, Iran, and Israel.
Speaking on the situation, Chinedu Ukadike, National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), said the cost of procuring petroleum products has risen sharply.
“This is a product we were getting with around N50 million, now we are getting it with more than N60 million or N70 million per truck, and the bank will bill us. All those loans we collect from banks—the interest rate is high,” he said.
“The turnover, the financial and cash value turnover is higher and the dividends are low. There is no stability, and up till now, we are still borrowing from banks to be able to meet demand and supply,” he added.
Marketers also report a steep drop in customer demand, with bulk buyers significantly reducing purchase volumes.
According to Ukadike, customers who previously bought between 10,000 and 20,000 litres now purchase as little as 1,000 to 2,000 litres due to the higher prices.
Another industry operator, Anwalu Ahmed, explained that petrol pricing is largely driven by replacement costs, as marketers must factor in the price of future imports.
“If the next cargo you bring in will cost significantly more due to exchange rate changes or international prices, marketers adjust prices to avoid selling at a loss,” he said.
He warned that selling at outdated prices could erode capital and lead to supply shortages over time.
Beyond pricing pressures, marketers highlighted logistical challenges, including poor road conditions that delay fuel transportation. Tanker drivers, they said, often spend several days in transit, increasing risks for operators moving products valued at over N65 million per truck.
Stakeholders have called on the Federal Government to introduce measures to ease the burden on both businesses and consumers.
The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) urged authorities to provide support, particularly for transportation costs.
Similarly, Muda Yusuf, Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), warned that rising energy costs could threaten the survival of small and medium-sized enterprises.
Labour groups have also expressed concern. The Nigeria Labour Congress (NLC) called for urgent government intervention, noting that higher fuel prices are driving up transportation, food costs, and overall living expenses.
