By Mohammed Bello Doka
Amid rising fuel prices, Nigeria's oil marketers are grappling with massive losses and potential shutdowns, with about 10,000 dealers on the verge of closing. Recent figures from the Nigerian Midstream and Downstream Petroleum Regulatory Authority reveal a dramatic decline in fuel consumption, which dropped to 4.5 million litres daily in August 2024, compared to 60 million litres per day in May 2023—a drastic 92% reduction.
The data also indicates that only 16 out of Nigeria's 36 states received fuel supplies from the Nigerian National Petroleum Company Limited in August, leading to shortages nationwide. Since President Bola Tinubu ended the fuel subsidy in May 2023, petrol prices have surged by approximately 488%, jumping from N175 to over N1,000 by October 2024. The persistent price increases have strained the economy, raised transport costs, fueled inflation, and led many Nigerians to abandon their cars in favor of public transportation.
The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) reports that the steep drop in fuel consumption has inflicted significant financial losses on the association, pushing nearly 10,000 members towards closure. PETROAN’s National Public Relations Officer, Dr. Joseph Obele, stated that the cost of a truckload of petrol has soared from N7 million to N47 million over the past 16 months. He also mentioned that during a recent meeting at PETROAN’s national headquarters, discussions indicated that thousands of marketers may exit the business within the next 45 days due to depleted trading capital.
Obele highlighted the impact on the workforce, noting that the affected marketers employ roughly one million people. To prevent widespread shutdowns, the association sent a letter to President Tinubu on October 21, requesting a N100 billion grant to support struggling businesses.
Similarly, the Independent Petroleum Marketers Association of Nigeria confirmed the drop in fuel consumption and acknowledged that its members are facing challenges. The association's president, Abubakar Maigandi, explained that higher prices have forced marketers to reduce their fuel purchases. “For example, someone who used to buy 10 trucks can now only afford eight," he said.
The Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) also expressed concerns, noting that the inability of marketers to purchase fuel has resulted in job losses for truck drivers and petrol station employees. NUPENG’s Secretary-General, Mr. Afolabi Olawale, described the situation as "grim," with many stations unable to afford even a single truckload of fuel, leaving truck drivers and station workers jobless.
While unable to provide exact figures on affected union members, Olawale emphasized that the downstream sector is suffering the most. He pointed out that employees involved in truck driving, fuel station operations, and depot services are feeling the brunt of the economic downturn.
Obele added that the high fuel prices have also curtailed cross-border smuggling of petrol, as the cost has made the activity less profitable.
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