Petrol price volatility causing us billions in losses, Nigerians not sympathetic, oil marketers say

Oil marketers have lamented that Nigerians are not sympathetic to the losses they incur due to volatility in the downstream petroleum sector.

In an exclusive chat with Nairametrics, the National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Chinedu Ukadike, said marketers incur losses running into billions of naira due to price volatility, particularly when prices suddenly fall.

The development comes amid sustained volatility in the downstream petroleum sector, driven by rising global crude oil prices linked to the Middle East conflict involving the United States, Iran and Israel.

Marketers argued that consumers pressure them to keep selling petrol at prevailing prices even when crude oil prices rise and the cost of getting the product increases, while they are expected to reduce pump prices when costs fall.

Marketers count losses from petrol volatility

The high cost of petrol is seriously affecting independent marketers, who have to cover the cost of purchasing products, transportation, storage, depot charges and other expenses that affect the viability of their businesses.

• “What do we do now? It has been the system of the trade since deregulation. The volatility of the price is now mastering us. We are becoming part of it. So, it is a normal thing. Once the crude oil drops, the refinery operators will also move in line with that.”
• “But we are worried that Nigerians are not sympathetic with marketers. Even when a lot of money is being removed from products. But if it is when the product has added money, they will be forcing us to sell at a prevailing price without even putting it.”
• “But now that the product has lost N25, the commuters will be looking for where they can pay to get it cheap.”

Ukadike wondered how some marketers, who still have more than 300 trucks on the road due to bad roads, will cope with a sudden N25 reduction in petrol prices after buying the products at higher prices.

• “As for our members, their trucks, because of the bad roads, over 300 trucks, they are still on their way, finding their destination at that market price. So, how do they come to cope with their losses of N25? It is very massive, marketers will lose billions of Naira,” he said.

Another oil marketer, Paul Akams, said the high cost of petrol affects everyone along the value chain, from marketers to transport operators and consumers.

• “The high cost of petrol is, as you know, something that affects everyone. As an independent marketer, we have to deal with the cost of purchasing the product, transportation, storage, depot charges, regulatory costs and other operational expenses. All these costs ultimately affect the pump price.”
• “The reality is that high petrol prices affect everyone along the value chain, from the marketer to the transport operator and ultimately the consumer,” he said.

The surge in prices pushed petrol from an average of N1,077–N1,205 in early July 2026 to an average of N1,395–N1,500 for most of September at filling stations, although retail prices have recently dropped to an average of N1,370.

Petrol smuggling remains a concern

The Federal Government and Nigerians have consistently advocated for immediate reductions in pump prices once global oil prices fall, while marketers say sudden price movements can leave them with products purchased at higher prices.

The issue of petrol smuggling to neighbouring countries, where the product may be cheaper, has also remained a concern in the downstream sector.

• “If you remember when subsidy was removed, Nigerians didn’t go to streets. But our neighbouring Benin Republic and other neighbouring countries went on the streets, demonstrating why the President of Nigeria should remove subsidy. Because I think they are the major beneficiaries.”
• “So, Nigeria is not even subsidizing products that they are using. They are subsidizing products used by neighbouring countries. Which is also harmful to them.”

Akams said petrol smuggling has been a recurring issue because there is an incentive for marketers to move products across borders illegally whenever there is a significant price difference between Nigeria and neighbouring countries.

He said marketers should not be simply blamed, adding that the government needs effective border monitoring, accurate tracking of petroleum products and pricing policies that reduce the incentive for arbitrage.

Ukadike, however, admitted that the level of smuggling has reduced drastically compared with previous years.

Marketers seek energy bank support

On how marketers are coping with high petrol prices, Ukadike said they want the establishment of an Energy Bank or petroleum bank where they can source funds to cushion the impact of price volatility.

He said such an institution would allow independent marketers to access funds when petrol prices increase and continue their operations without severe financial pressure.

• “We, the independent marketers, want an energy bank, or petroleum bank, that can be able to be cushion the problem of price volatility. Whereby now, if the price is being increased, we can be able to source funds seamlessly, and continue our business.”
• “You know, like we have a sister industry in the Bank of Industry and Agriculture.”

Akams said marketers are also trying to cope by improving efficiency, reducing unnecessary operating costs and carefully managing supply and inventory.

• “We are trying to cope by improving efficiency, reducing unnecessary operating costs and carefully managing our supply and inventory. But there is a limit to how much a marketer can absorb without affecting the viability of the business,” he said.

What you should know

Oil marketers in March this year raised concerns that their businesses were suffering from the spike in petrol prices linked to the ongoing conflict in the Middle East.

They said they required a much larger financial outlay to purchase a truckload of petroleum products, while returns were very low and could be inadequate to cover the high interest rates on bank loans used to finance purchases.

They also said demand had dropped drastically, with some customers who previously bought 20,000 litres or 10,000 litres now purchasing about 2,000 litres or 1,000 litres.

The marketers maintained that the rising cost of petrol supply had increased the financial burden on operators, many of whom rely on bank loans to finance purchases of petroleum products.