By Chibuzor Alli
Petroleum marketers have rejected the Federal Government’s proposed N1,350-per-litre ceiling on petrol costs, arguing that price controls could distort Nigeria’s deregulated downstream market instead of addressing the factors driving fuel prices higher.
The Major Energies Marketers Association of Nigeria said the focus should instead be on transparent pricing, stronger competition, efficient distribution and measures to remove supply bottlenecks and reduce operating costs.
The association stated this during its third-quarter press engagement, held virtually on Thursday in partnership with S&P Global Energy.
MEMAN said “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 marketers’ position came 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-litre ceiling on petrol’s ex-gantry or landing cost.
Under the proposed arrangement, refiners and importers would initially absorb costs above the ceiling and recover the shortfall later when market conditions improve.
Oyedele said the arrangement would be reviewed monthly and was intended to moderate petrol price fluctuations rather than restore the subsidy regime 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.
“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.
Marketers Seek Lower Supply Costs
MEMAN said the debate over petrol prices should focus on the underlying costs affecting the downstream market rather than imposing a ceiling.
It called for clearer bulk supply arrangements covering product access, pricing, delivery schedules and contractual obligations.
The association also sought better visibility of inventories, increased storage capacity, improved transport coordination and stronger contingency planning.
According to the marketers, a properly structured market should encourage competition, strengthen supply security and improve outcomes for consumers without relying on government-imposed price controls or broad-based fuel subsidies.
The group further called for non-discriminatory access to petroleum products and more efficient regulatory processes.
It said quality standards must be maintained, measurements must be accurate and consumers must receive the quantities of products for which they have paid.
Petrol Prices Face Global Market Pressure
The Federal Government’s proposed price ceiling followed increases in petrol prices linked to disruptions in international oil markets and renewed pressure on households and businesses.
The government also announced a 30-day petrol discount at Nigerian National Petroleum Company Limited filling stations, with priority given to public transport operators, as part of efforts to cushion consumers from higher fuel costs.
MEMAN said Nigeria should prioritise output from domestic refineries while allowing imports to bridge supply gaps and respond to disruptions.
The association said this approach would help maintain supply continuity while allowing market participants to respond to changing conditions.
Global Refining Trends Add to Price Volatility
The MEMAN engagement also examined developments in global and West African refined petroleum markets and the need for credible regional pricing benchmarks.
S&P Global Energy highlighted the impact of geopolitical tensions, refining disruptions and changing global supply dynamics on refined petroleum prices, particularly middle distillates such as diesel and aviation fuel.
The presentations identified the Free on Board West Africa and STS Lomé assessments as reference points for domestically supplied and imported refined products respectively.
Greater transparency, reliable market data and wider industry adoption were identified as necessary for developing a credible West African reference market.
MEMAN maintained that a sustainable petroleum market required predictable pricing arrangements, efficient supply chains and fair competition.
It said controlling prices without addressing the costs of sourcing, transporting, storing and distributing petroleum products could leave structural problems in the downstream market unresolved.
The association therefore reiterated its call for clearer bulk supply arrangements, predictable pricing mechanisms and improved coordination between domestic refiners and importers.
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