Major marketers reveal their position on FG's petrol price cap

• MEMAN opposes the proposed ₦1,350 petrol price ceiling, saying price caps could disrupt competition without fixing supply problems
• Government says the monthly ceiling would cushion price swings, while questions remain over how suppliers will recover extra costs
• Marketers call for better logistics, clear supply agreements and stronger domestic refining to improve fuel availability and price stability

Pascal Oparada is a journalist with Legit.ng, covering technology, energy, stocks, investment, and the economy for over a decade.

The Major Energies Marketers Association of Nigeria (MEMAN) has opposed the Federal Government’s proposed ₦1,350-per-litre ceiling on petrol costs, warning that arbitrary price limits could distort competition without resolving persistent supply and distribution challenges.

The association instead called for transparent, market-driven pricing, improved logistics and lower operating costs, arguing that sustainable fuel price stability depends on addressing supply bottlenecks rather than imposing government-determined limits.

MEMAN disclosed its position during its third-quarter press engagement held virtually on Thursday in partnership with S&P Global Energy.

Marketers explain why price caps may fail

MEMAN maintained that government-imposed price ceilings would not address the underlying challenges confronting Nigeria’s downstream petroleum sector, according to a report by PetroleumPriceNG.

“Government arbitrary price caps are not the solution to petroleum market challenges,” the association said, advocating transparent pricing, efficient distribution and measures to reduce operating costs.

According to the marketers, a competitive market supported by predictable supply arrangements would provide a more sustainable solution than price restrictions that could discourage investment or disrupt product availability.

The position comes amid growing concerns over rising petrol prices and their impact on Nigerian households and businesses.

FG proposes ₦1,350 Ceiling on Petrol Costs

The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, had disclosed that the Federal Government was negotiating a ₦1,350-per-litre ceiling on petrol’s ex-gantry or landing cost.

Under the proposed arrangement, refiners and importers would initially absorb costs exceeding the ceiling and recover the shortfall when market conditions improved.

Oyedele said the mechanism, which would be reviewed monthly, was designed to moderate price fluctuations rather than reinstate the petrol subsidy removed in May 2023.

He described the proposal as price modulation, insisting that it was neither a subsidy nor conventional price control.

However, questions remain over how suppliers would finance the additional costs and the conditions under which they would recover their losses.

Rising fuel costs trigger government intervention

The proposal follows rising petrol prices linked to disruptions in international oil markets, putting additional pressure on consumers and businesses.

The Federal Government also announced a 30-day petrol discount at Nigerian National Petroleum Company Limited filling stations, prioritising public transport operators as part of efforts to cushion the impact.

For downstream operators, the success of the proposed ceiling will depend on transparent reimbursement arrangements, predictable pricing and assurances that refiners and importers can continue supplying the market without accumulating unsustainable losses.

MEMAN demands better supply chain coordination

Beyond pricing, MEMAN called for clearer bulk supply arrangements defining product access, pricing, delivery schedules and contractual obligations.

The association also urged improvements in inventory visibility, storage capacity, transport coordination and contingency planning to strengthen the reliability of petroleum distribution.

It argued that non-discriminatory access to petroleum products and more efficient regulatory processes would encourage competition and improve supply security.

MEMAN commended the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) for progress in digitalising licensing, publishing market data and promoting product quality and fair competition.

It also stressed the need to enforce quality standards, ensure accurate measurements and guarantee that consumers receive the quantities they pay for.

Domestic Refineries remain central to supply security

The engagement also examined developments in global and West African refined petroleum markets, with S&P Global Energy highlighting how geopolitical tensions, refining disruptions and shifting supply patterns had contributed to price volatility.

MEMAN advocated prioritising domestic refinery output while retaining imports to bridge supply gaps and respond to disruptions.

Achieving this, however, would require reliable production, transparent pricing and effective coordination among refiners, importers, depot operators and marketers.

Ultimately, the disagreement highlights the challenge of protecting consumers while maintaining the commercial viability of Nigeria’s deregulated downstream petroleum sector.

For MEMAN, lasting price stability will depend on competitive supply, predictable pricing, efficient logistics and lower operating costs. Whether the Federal Government’s proposed ceiling can achieve that balance without undermining supply remains a key question for the industry.

NNPC reverses petrol price hike

Legit.ng earlier reported that the Nigerian National Petroleum Company Limited (NNPCL) has cut petrol prices at its Abuja filling stations to N1,370 per litre, reversing a weekend increase that had pushed the price to N1,405 per litre.

A market survey conducted on Monday, October 12, showed that NNPCL outlets in Berger, Wuse Zone 6 and Wuse Zone 4 had adjusted prices downwards by N35 per litre.

Source: Legit.ng