The Nigerian downstream petroleum sector is currently facing a severe crisis, with over 4,900 petrol retail outlets shutting down operations due to intense financial pressures brought about by volatile fuel pricing. This alarming trend was confirmed by key stakeholders in the oil marketing industry who attribute the closures to unpredictable price fluctuations by the Dangote Petroleum Refinery and other fuel importers.
Since the removal of petrol subsidies and the subsequent deregulation of the downstream sector in October 2024, the market has been in a state of upheaval. The $20 billion Dangote refinery, operating at a capacity of 650,000 barrels per day, has revised petrol prices six times between January and April 2025 alone. Prices started at N950 per litre but gradually fell to N835, leaving marketers struggling to keep pace with rapid and often unpredictable price swings.
Industry insiders lament that these pricing shifts, combined with logistical challenges and a lack of regulatory oversight, have forced many independent marketers and retailers to drastically reduce the volume of fuel they purchase. In some cases, three or more marketers pool resources to afford a single truckload, while those without adequate financial backing have been compelled to cease operations entirely.
The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) confirmed that over 70 percent of its 7,000 registered retail outlets have closed shop. PETROAN President, Billy Gillis-Harry, emphasized the severe impact of these closures, stating, “We struggle to get loans from banks, and with prices constantly fluctuating before the fuel even reaches the filling stations, many businesses have become unsustainable. Customers flock to stations selling at lower prices, leaving others with no choice but to close.”
Gillis-Harry further revealed that to survive, some dealers have resorted to sourcing fuel from suppliers offering “soft landing” deals to cushion the financial shocks and maintain competitiveness. However, he called on regulatory authorities to intervene promptly to stabilize pricing and avoid worsening scarcity and price hikes.
The crisis extends beyond retail stations. Over the past two years, more than 70 tank farm operators, responsible for fuel storage, have shut down their facilities. These tank farms, representing approximately 65 percent of Nigeria’s approved storage capacity, now lie idle as marketers increasingly bypass them due to logistical bottlenecks and cost concerns.
The Independent Petroleum Marketers Association of Nigeria (IPMAN) also voiced concerns about the economic strain on its members, highlighting logistics delays and price instability as major contributors to losses. IPMAN’s National Publicity Secretary, Chinedu Ukadike, disclosed that many trucks spend up to three days in transit, only to arrive at destination points where prices have dropped, leading to losses between N300,000 and N1 million per truckload.
Ukadike explained, “The uncertainty in a liberalized market without proper regulation causes price swings that make marketers cautious. We have had to reduce bulk purchases and now rely on pooling resources. Despite the challenges, we remain committed to sustaining operations.”
The current fuel market turmoil underscores the critical need for stronger economic buffers, clearer regulatory frameworks, and improved logistics infrastructure to support independent marketers who form the backbone of Nigeria’s fuel distribution network. Without these interventions, the sector risks further contraction, worsening fuel scarcity, and increased prices that will ultimately impact Nigerian consumers nationwide.
The government’s bold step to deregulate fuel pricing aimed at promoting competition and efficiency has inadvertently led to a fiercely contested market, dominated by pricing wars between the Dangote refinery and fuel importers. While competition is healthy, the lack of market stability is threatening the survival of small and medium-scale players.
In conclusion, stakeholders are urging immediate action to introduce effective price stabilization mechanisms and provide financial support to independent marketers. This will ensure fuel availability across Nigeria and protect consumers from the adverse effects of the current crisis.