Petroleum marketers have opposed the government’s proposed N1,350-per-litre petrol price cap, arguing that prices in Nigeria’s deregulated downstream sector should be determined by market forces, competition and improved distribution efficiency.
The Major Energies Marketers Association of Nigeria said arbitrary price controls would not resolve the underlying challenges in the petroleum market. Instead, it called for transparent pricing mechanisms and measures to address supply bottlenecks and lower operating costs.
According to a summary of MEMAN’s third-quarter press engagement, held virtually on Thursday in partnership with S&P Global Energy, the association maintained that “government arbitrary price caps are not the solution to petroleum market challenges”.
“Rather than distorting market prices, the focus should be on transparent, market-driven pricing, efficient distribution and measures that address supply bottlenecks and reduce operating costs,” MEMAN added.
The association’s position comes a week after the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, announced that the Federal Government was negotiating a N1,350-per-litre cap on petrol’s ex-gantry or landing cost.
Under the proposed arrangement, refiners and importers would initially bear costs exceeding the ceiling, with the shortfall to be recovered later when market conditions improve.
Oyedele said the arrangement, which would be reviewed monthly, was intended to moderate petrol price fluctuations rather than reintroduce the fuel subsidy removed in May 2023.
“We are introducing price modulation. The government is negotiating a ceiling of N1,350 per litre on the ex-gantry or landing cost of petrol to keep the price stable.
“We are introducing price modulation. The government is negotiating a ceiling of N1,350 per litre on the ex-gantry or landing cost of petrol to keep the price stable.
“When costs rise above the ceiling, refineries and importers will carry the shortfall and recover it later. This is neither a subsidy nor price control,” the minister said.
The government’s proposal followed a surge in petrol prices driven by disruptions in the international oil market, putting further pressure on households and businesses. It also announced a 30-day petrol discount at Nigerian National Petroleum Company Limited filling stations, prioritising public transport operators, to cushion the impact of rising fuel costs.
MEMAN also called for clearer bulk supply arrangements outlining product access, pricing, delivery schedules and contractual obligations. It further advocated improved inventory visibility, expanded storage capacity, better transport coordination and stronger contingency planning to address supply challenges.
On regulation, MEMAN praised the Nigerian Midstream and Downstream Petroleum Regulatory Authority for its efforts to improve product quality, digitise licensing processes, publish relevant market data and introduce measures to promote fair competition.
