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(Motorists queue to buy fuel at a filling station. Photo: Daily Trust)
Nigeria’s downstream petroleum sector may be heading for another showdown as independent fuel marketers have pushed back against the Federal Government’s demand for a cut in pump prices.
The marketers have threatened to shut down filling stations nationwide if the government imposes price controls despite the country’s deregulated fuel market.
The warning followed recent comments by the Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, that government agencies would not tolerate profiteering by operators even though petrol pricing had been liberalised.
But the National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Chinedu Ukadike, said any attempt to impose price controls would violate the principles of deregulation and force marketers to suspend operations across the country.
“If the government tries to enforce price control, we will shut down our filling stations nationwide.
You cannot operate a deregulated market and at the same time dictate the price marketers should sell their products without considering the cost of purchase,” Ukadike said.
He maintained that marketers were not exploiting Nigerians but were instead grappling with mounting financial losses arising from frequent downward adjustments in depot prices, particularly by the Dangote Refinery.
According to him, many marketers purchase products at higher rates with bank financing, only for depot prices to decline before their existing stock is exhausted, leaving them to absorb significant losses.
Ukadike said the Petroleum Industry Act (PIA) provides for a market-driven pricing system, warning that government interference would discourage investment and undermine confidence in the downstream sector.
