Fuel Consumption Dwindles By 92% As Rising Prices Push 10,000 Oil Dealers Out of Business
By: Abdulwasiu Akintunde
The removal of fuel subsidies has triggered a sharp drop in fuel consumption across Nigeria, forcing many oil marketers to the verge of closure.
Industry reports reveal that fuel consumption fell drastically from 60 million litres per day in May 2023 to just 4.5 million litres per day in August 2024—a staggering 92% decline.
Data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority show that only 16 out of the 36 States received fuel supplies from the Nigerian National Petroleum Company Limited (NNPC) in August, leading to shortages nationwide.
OPEN TELEVISION NAIJA (OTN) News recalls that since the subsidy removal was announced by President Bola Tinubu in May 2023, petrol prices have surged by 488%, rising from N175 per litre to over N1,000 by October 2024.
This price hike has disrupted the economy, pushing up transportation costs, fueling inflation, and forcing many motorists to abandon their vehicles in favor of public transport.
Oil marketers are feeling the pinch. Dr. Joseph Obele, the National PRO of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), warned that about 10,000 members are on the verge of shutting down due to severe losses.
He explained that the cost of purchasing a truckload of fuel had soared from N7 million to N47 million over the past 16 months, depleting marketers' trading capital.
“Three days ago, we met at the PETROAN headquarters, and the outlook is grim,” Obele stated.
“Within 45 days, nearly 10,000 dealers could exit the business unless we receive urgent support. We’ve requested a N100 billion grant from the federal Government to keep these businesses afloat.”
The Independent Petroleum Marketers Association of Nigeria (IPMAN) confirmed the downturn, explaining that members have reduced purchases to cope with rising costs.
"Many dealers who previously bought 10 trucks can now only afford eight," said IPMAN President Abubakar Maigandi.
According to the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG), job losses are mounting, particularly among truck drivers and petrol station workers.
However, NUPENG Secretary-General, Afolabi Olawale noted that many petrol stations have shut down due to marketers' inability to afford fuel, leaving employees out of work.
“This situation is evolving, and it's difficult to provide exact numbers, However, those in the downstream sector truck drivers, station workers, and depot representatives are the most affected," Said, Olawale.
Meanwhile, Obele noted a positive side effect: the rising fuel prices have curbed cross-border smuggling, which was once rampant. But unless intervention arrives soon, Nigeria’s oil marketing sector could face a crisis of unprecedented scale.
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