Nigeria’s fuel consumption has plummeted as soaring prices continue to squeeze consumers, leaving thousands of oil marketers facing heavy losses and pushing around 10,000 dealers towards potential shutdown.
According to data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority, daily fuel consumption dropped sharply to 4.5 million liters in August 2024, a drastic 92% decrease from 60 million liters in May 2023.
In August, only 16 out of Nigeria’s 36 states received fuel from the Nigerian National Petroleum Company Limited, causing significant shortages nationwide.
Since President Bola Tinubu removed the fuel subsidy in May 2023, petrol prices have surged nearly 488%, rising from N175 to over N1,000 per liter by October 2024.
These price increases have impacted transportation costs and driven inflation, with many Nigerians now relying on public transport due to the unaffordable cost of fuel.
The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) reports that the sharp decline in fuel consumption has led to severe financial losses.
PETROAN’s National Public Relations Officer, Dr. Joseph Obele, revealed that about 10,000 association members are on the verge of closing down due to dwindling trading capital.
He noted that the cost of a single truckload of petrol rose from N7 million to N47 million in just 16 months.
“Just days ago, PETROAN held a meeting at our national headquarters, where we concluded that around 10,000 members would likely quit within the next 45 days if they don’t receive urgent support,” Obele said.
PETROAN has since requested a N100 billion grant from the government to help save their members’ businesses.
Abubakar Maigandi, President of the Independent Petroleum Marketers Association of Nigeria, confirmed a decline in fuel purchases among marketers due to high costs.
“Fuel consumption has dropped, and the price of a truckload is significantly higher. Many members now buy less fuel. For instance, someone who used to buy 10 truckloads now only buys eight,” Maigandi explained.
The fuel crisis has also affected employment across the sector. Afolabi Olawale, Secretary-General of the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG), shared that rising costs have led to job losses among truck drivers and petrol station staff.
“Many petrol stations can’t afford a single truckload of fuel, which means fewer loads for our drivers and closures across stations, leading to job losses,” Olawale said.
He added that while the situation is still evolving, the downstream sector—consisting of truck drivers, station staff, and marketers’ representatives—is currently the hardest hit.
In addition, the high fuel prices have curbed cross-border smuggling, according to PETROAN’s Dr. Obele, as the cost increase makes such activities less viable.
As marketers and consumers alike grapple with the effects of the subsidy removal, stakeholders are calling for urgent government intervention to ease the financial strain on the sector and the Nigerian economy at large.