Petroleum marketers have opposed the Federal Government’s proposed ₦1,350-per-litre petrol price ceiling, insisting that competition, market forces and improved distribution efficiency should determine prices in Nigeria’s deregulated downstream petroleum sector.
The Major Energies Marketers Association of Nigeria (MEMAN) said arbitrary price caps would not address the underlying challenges in the petroleum market, calling instead for transparent pricing mechanisms, the removal of supply bottlenecks and measures to reduce operating costs.
The association stated its position in a summary of its third-quarter press engagement held virtually on Thursday in partnership with S&P Global Energy.
“Government arbitrary price caps are not the solution to petroleum market challenges,” MEMAN said.
“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 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 above the ceiling and recover the shortfall later when market conditions improved.
Oyedele said the 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 ₦1,350 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.
The proposal followed rising petrol prices linked to disruptions in international oil markets and renewed pressure on households and businesses.
The Federal Government also announced a 30-day petrol discount at Nigerian National Petroleum Company Limited (NNPCL) filling stations, with public transport operators identified as priority beneficiaries, to cushion the impact of higher fuel costs.
MEMAN Seeks Improved Supply and Distribution
MEMAN called for clearer bulk supply arrangements covering product access, pricing, delivery schedules and contractual obligations.
The association also advocated improved inventory visibility, increased storage capacity, better transport coordination and stronger contingency planning to minimise disruptions across the petroleum supply chain.
It said a well-structured market should encourage competition, improve supply security and deliver 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 (NMDPRA) for its efforts to promote product quality, digitise licensing, publish market data and advance measures aimed at encouraging fair competition.
The association further called for non-discriminatory access to petroleum products and more efficient regulatory processes.
It stressed the importance of maintaining quality standards, ensuring accurate measurements and delivering the quantities for which customers have paid.
MEMAN also advocated prioritising output from domestic refineries while allowing imports to bridge supply gaps and address disruptions when local production falls short of demand.
Industry Examines Global Petroleum Market Trends
The engagement examined developments in global and West African refined petroleum markets, including the need for credible regional pricing benchmarks.
S&P Global Energy highlighted how geopolitical tensions, refinery disruptions and changing global supply dynamics had contributed to price volatility, particularly in middle distillates such as diesel and aviation fuel.
The presentations identified the Free on Board (FOB) West Africa and STS Lomé assessments as reference points for domestically supplied and imported refined petroleum products, respectively.
Participants stressed that greater transparency, reliable market data and wider industry adoption would be necessary to establish a credible West African reference market.
MEMAN maintained that a sustainable petroleum market depended on predictable pricing arrangements, efficient supply chains and fair competition.
The debate over the proposed ₦1,350-per-litre ceiling highlights the challenge facing the government as it seeks to protect consumers from rising fuel costs while maintaining a commercially viable petroleum supply chain.
A price ceiling can limit the amount suppliers charge at a specified point in the distribution chain, but its impact depends on the level at which it is imposed, prevailing supply costs and whether market participants can recover their operating expenses.
MEMAN’s position is that controlling prices without addressing the underlying costs of sourcing, transporting, storing and distributing petroleum products could leave structural market problems unresolved.
The association is instead advocating clearer supply agreements, predictable pricing mechanisms and better coordination between domestic refiners and importers to improve market efficiency and safeguard supply.
