Business & Strategy

Fuel Crisis: Nearly 5,000 Petrol Stations Shut Down Amid Price Volatility

Written by Agboola Oluwafemi on May 22, 2025

News Views: 169

More than 4,900 fuel retail outlets have ceased operations across Nigeria, as independent petroleum marketers grapple with mounting financial losses driven by severe price instability in the petrol market. This crisis has been attributed to erratic fluctuations in the price of Premium Motor Spirit (PMS) supplied by the Dangote Refinery and imported alternatives.

Since January 2025, the $20 billion Lekki-based Dangote Refinery has adjusted petrol prices at least six times, dropping from N950 to N835 per litre. These unpredictable shifts, combined with the broader deregulation of the downstream oil sector following the removal of fuel subsidies in October 2024, have destabilised the market.

Marketers are increasingly unable to afford bulk purchases, with many resorting to pooling resources to buy a single truckload of fuel. Those lacking financial resilience have been forced to exit the industry entirely.

According to the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), over 70% of its 7,000 member stations have shut down. PETROAN President Billy Gillis-Harry cited a lack of accessible financing and erratic pricing as key contributors to the collapse. He noted that dealers often face price changes between the point of purchase and delivery, leading to significant losses.

Dealers have turned to alternative suppliers offering more flexible terms to stay afloat. However, the absence of consistent pricing signals from dominant market players continues to undermine market stability.

The situation extends beyond retail stations. Over 70 of the country’s 120 approved tank farms—roughly 65%—are now inactive, as marketers increasingly bypass them in favour of direct trucking due to cost and efficiency concerns.

The Independent Petroleum Marketers Association of Nigeria (IPMAN) corroborated the widespread distress. National Publicity Secretary Chinedu Ukadike reported that members face persistent losses ranging from N300,000 to over N1 million per truck, due to price drops during prolonged delivery times. Marketers are now combining funds to purchase products collectively, operating on a skeletal basis to mitigate losses.

Despite these pressures, IPMAN’s 20,000-strong membership remains operational, albeit under constrained conditions. The association called for urgent intervention, including regulatory oversight and economic support, to prevent further deterioration of Nigeria’s fuel distribution infrastructure.

The ongoing crisis highlights the vulnerability of Nigeria’s liberalised fuel market, where the absence of price regulation and safety nets continues to endanger independent marketers—crucial players in the national fuel supply chain.