10,000 oil dealers to quit business as fuel consumption dips across Nigeria

As fuel prices skyrocket, oil marketers are sounding the alarm over significant financial losses, with around 10,000 dealers on the verge of closing their businesses.

According to data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority, daily fuel consumption in Nigeria fell drastically to 4.5 million litres in August 2024, down from 60 million litres in May 2023—a 92% drop.

The report further reveals that only 16 of the 36 states received fuel supplies from the Nigerian National Petroleum Company Limited (NNPCL) in August, exacerbating shortages.

The sharp decline in consumption follows the removal of fuel subsidies by President Bola Tinubu in May 2023, which resulted in petrol prices surging by 488%, climbing from N175 per litre to over N1,000 by October 2024.

The rising cost of fuel has disrupted the economy, inflating transportation costs and driving up the prices of goods and services, as many Nigerians turn to public transportation, leaving their personal vehicles unused.

The national leadership of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has reported that the severe drop in fuel consumption is driving many members toward closure, with about 10,000 dealers at risk of shutting down.

Commenting on the situation, PETROAN’s National Public Relations Officer, Dr. Joseph Obele, disclosed that the cost of a truckload of petrol had skyrocketed from N7 million to N47 million over the past 16 months.

“Three days ago, there was a meeting at the national headquarters of PETROAN. At the meeting, there was, an indication that about 10,000 of our members would quit business in the next 45 days because their trading capital had been severely affected,” Obele explained.

He further noted that the affected dealers employ about one million workers across the sector.

“That was why we wrote a letter to Mr President, dated October 21, requesting a grant of N100 billion to prevent the shutdown of these businesses in the coming weeks,” he added.

Abubakar Maigandi, President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), confirmed the consumption drop and stated that it had significantly impacted their operations.

“There is a drop in consumption, and the price of a truckload is higher now. So, we’ve had to scale down purchases. For example, a dealer who previously bought 10 trucks can now only afford eight,” Maigandi explained.

The Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) has also raised concerns over job losses resulting from the inability of marketers to afford fuel supplies. Truck drivers and petrol station workers are among the most affected.

“The economy is not smiling at all. Many petrol station owners cannot even afford a single truckload, and this has affected our members,” said NUPENG’s Secretary-General, Mr. Afolabi Olawale.

He added, “This situation is still unfolding, and I can’t give exact figures of those affected because it involves both formal and informal sectors. But workers in the downstream sector are the hardest hit, including truck drivers, station workers, and depot representatives.”

Obele also highlighted that the spike in fuel prices had curbed cross-border fuel smuggling, which had previously been rampant.

 

(PUNCH)