Oil Marketers Urge Tinubu for Support, Consider Shutdown Amid Decline in Fuel Demand

As fuel prices soar, leading to a sharp decline in consumption, oil marketers in Nigeria are struggling, with nearly 10,000 dealers on the verge of shutting down. According to data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), daily fuel consumption plunged to 4.5 million liters in August 2024, a dramatic drop from 60 million liters per day in May 2023—a 92 percent decrease.Continue Reading>>>...CONTINUE READING>>>

Adding to the crisis, only 16 out of Nigeria’s 36 states received fuel from the Nigerian National Petroleum Company Limited in August, worsening fuel shortages nationwide.The situation stems from President Bola Tinubu’s removal of the fuel subsidy in May 2023, which caused petrol prices to spike by 488 percent, from N175 per liter to over N1,000 by October 2024.

This price hike has raised transportation costs, fueled inflation, and pushed many Nigerians to abandon personal vehicles in favor of public transport.Dr. Joseph Obele, spokesperson for the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), confirmed that the sharp drop in fuel consumption has led to significant financial losses for their members, putting about 10,000 fuel stations at risk of closure.

Obele explained that the cost of a truckload of petrol has surged from N7 million to N47 million over the last 16 months, increasing financial strain on their members.“Just three days ago, PETROAN held a national meeting where we estimated that nearly 10,000 of our members might shut down in the next 45 days due to lack of funds,” Obele told Sunday PUNCH.

In response, PETROAN sent a letter to the president on October 21, requesting a N100 billion grant to prevent these closures, which would affect nearly one million workers.Abubakar Maigandi, President of the Independent Petroleum Marketers Association of Nigeria, expressed similar concerns, saying that members have cut down on fuel purchases as the cost of a truckload has surged.

Where members previously bought 10 trucks of fuel, they can now only afford eight. Supply remains insufficient, Maigandi said, highlighting the supply challenges.The Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) also voiced concern, noting job losses among truck drivers and fuel station employees due to the slowdown in operations.Continue Reading>>>

NUPENG’s Secretary-General, Afolabi Olawale, described the gravity of the situation: “Many petrol stations can’t afford even one truckload of fuel, leading to closures and job losses for drivers and station workers.”Olawale acknowledged the crisis has affected various sectors, but said the downstream sector—including truck drivers, station employees, and depot workers—has been hit hardest.

He was unable to give specific job loss numbers, describing the situation as “ongoing.”Obele also noted that the rise in fuel prices has helped curb cross-border fuel smuggling, a longstanding issue in the region.