10,000 oil dealers may close shop as drop in fuel consumption, high cost hit hard

No fewer than 10,000 oil marketers are at risk of shutting down as fuel consumption plummets nationwide due to skyrocketing prices and product scarcity.

The markers expressed their fears in an interview with Sunday Punch.

Pulse reported that the latest data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMPDRA) put nationwide fuel consumption at 4.5 million litres per day in August 2024.

The figure represents a significant drop from 60 million litres per day in May 2023, a staggering 92% decline.

According to the data, only 16 out of the 36 states received fuel from the Nigerian National Petroleum Company (NNPC) Limited in August, leading to widespread shortage.

Fuel prices have been rising at an exponential rate since President Bola Tinubu came to office in 2023.

The President announced the end of the petrol subsidy regime on his first day in office, triggering a price surge from ₦185 to over ₦1,000 by October 2024.

The continuous price increases have further stifled the already battered economy, driving up the cost of food and transportation, and fuelling inflation to a three-decade high.

The situation has plunged many Nigerians into chronic hardship as lamentation becomes the order of the day.

A report by a French news agency also detailed how Nigerians have been forced to abandon their vehicles, opting instead for public transportation as the hardship permeates every strata of the nation.

Oil marketers raise the alarm

The national leadership of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) lamented that the drop in petrol consumption had caused its members huge losses, adding that 10,000 of them were on the verge of closing shop.

The PETROAN National Public Relations Officer, Dr Joseph Obele, said the cost of loading a truck of fuel had risen from ₦7m to ₦47m in the last 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 the business in the next 45 days because their trading capital had been severely affected,” Obele told Sunday Punch.

He also warned of the potential job losses as the affected marketers had a combined total staff strength of about one million.

“That was why we wrote a letter to Mr President, dated October 21, requesting a grant of N100bn to save the affected marketers’ businesses from shutting down in the next few weeks,” the PETROAN spokesman added.

For his part, the President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Abubakar Maigandi, also confirmed the massive reduction in fuel consumption, adding that members of the union were equally affected.

“There is a drop in consumption and the price of a truckload is higher now. So, we have reduced the quantity of fuel we buy. For instance, someone who bought 10 trucks before can only buy eight now. So, we haven’t been getting the right quantity that we are supposed to get. We sell only the little quantities we get,” he said.

Meanwhile, the leadership of the Nigeria Union of Petroleum and Natural Gas Workers (PENGASSAN) stated that the inability of the oil marketers to buy products had resulted in job losses for truck drivers and petrol station workers in the country.

“The economy is not smiling at all. Many petrol station owners cannot even buy a single truckload, and this has affected our members. Those of them that are truck drivers hardly get loads to carry anymore. Many petrol stations have closed down and our members who are petrol station workers have lost their jobs,” NUPENG Secretary-General, Afolabi Olawale told the platform.

Asked to state the actual number of NUPENG members affected, Olawale said, “This is an unfolding situation. It’s evolving, so I may not be able to give you the actual number of people affected now because we have those in the informal and formal sectors. We have people in the upstream, downstream, and midstream. But I don’t have the statistics right here with me to give you.

“Though everybody is affected, those in the downstream are the most affected. It affects those in the downstream sector directly because they are truck drivers, station workers, and the representatives of the marketers at different depots.”