Petroleum marketers have rejected government-imposed N1,350 price caps on petrol, insisting that market forces, competition, and improved distribution efficiency should determine prices in Nigeria’s deregulated downstream sector.
The Major Energies Marketers Association of Nigeria said arbitrary price caps would not address the underlying challenges in the petroleum market, advocating transparent pricing mechanisms and measures to tackle supply bottlenecks and reduce 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.”
It added, “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.”
The position comes a week after the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, announced that the Federal Government was negotiating an N1,350-per-liter ceiling on petrol’s ex-gantry or landing cost, under which refiners and importers would initially absorb costs above the ceiling and recover the shortfall later when market conditions improved.
Oyedele said the proposed arrangement, which would be reviewed monthly, was designed to moderate price fluctuations rather than reintroduce the petrol subsidy removed in May 2023.
“We are introducing price modulation. The government is negotiating a ceiling of N1,350 per liter 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 rising petrol prices linked to international oil market disruptions and renewed pressure on households and businesses. It also announced a 30-day petrol discount at Nigerian National Petroleum Company Limited filling stations, with priority for public transport operators, as part of measures to cushion the impact of higher fuel costs.
MEMAN also called for clearer bulk supply arrangements covering product access, pricing, delivery schedules, and contractual obligations, as well as improved inventory visibility, storage capacity, transport coordination, and contingency planning.
The association said a well-structured market should enable competition, improve supply security, and support better outcomes for consumers without relying on government-imposed price controls or broad-based fuel subsidies.
On regulation, MEMAN commended the Nigerian Midstream and Downstream Petroleum Regulatory Authority for its progress in promoting product quality, digitalizing licensing, publishing useful market data, and advancing measures to foster fair competition.
It further advocated non-discriminatory access to petroleum products and efficient regulatory processes, stressing the need to uphold quality standards, ensure accurate measurement, and deliver the quantities customers pay for.
The engagement also examined developments in global and West African refined petroleum markets, including the need for credible regional pricing benchmarks.
