Nigeria’s oil marketers, particularly members of the Independent Petroleum Marketers Association of Nigeria (IPMAN), are increasingly divesting from their filling stations due to the ongoing scarcity of Premium Motor Spirit (PMS), commonly known as petrol.
The combination of fuel scarcity and the rising costs of procuring products from private depots has pushed many marketers to the brink, making their operations unsustainable.
Members of the Major Oil Marketers Association of Nigeria (MOMAN), with fewer operational stations in urban areas, have been less affected.
Meanwhile, IPMAN boasts over 3,000 stations spread across the country, including remote areas.
The situation has arisen due to the Nigerian National Petroleum Company Limited (NNPCL) reducing its product supply to IPMAN members as a result of the fuel scarcity.
NNPCL, the sole importer, sells PMS to the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) at an official price of N556 per litre, which is then sold to IPMAN at N616 per litre.
This results in retail prices of around N630 per litre when additional transportation and charges are factored in.
Inflation and reduced patronage have further compounded the financial strain on IPMAN members, leading to the closure of many filling stations. Additionally, banks are hesitant to extend loans to these businesses.
The hurdles in the supply chain are driving some marketers to sell their stations to better navigate the challenging economic landscape.
The future of Nigeria’s fuel market remains uncertain, with increasing costs, inflation, and fluctuations in global oil prices complicating matters.
However, the NNPC has asserted that the downstream sector is now deregulated, leaving marketers to procure fuel independently.