PETROAN explains why Nigerians must wait longer for cheaper petrol

The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has said petrol prices cannot be reduced immediately because most filling stations are still selling fuel bought at higher prices. The association said marketers need to recover their costs, deal with expensive loans, and make enough profit to keep their businesses running.

Why prices will not drop instantly

Speaking on the development, PETROAN President, Billy Gillis-Harry, said fuel retailers are unable to instantly lower pump prices because much of the petrol currently being sold was purchased when prices were significantly higher. According to him, marketers must first recover the cost of existing inventory before reflecting lower market prices at the pumps.

He explained that selling fuel below its acquisition cost would create financial difficulties for operators and could threaten their ability to replenish supplies. He said: “When prices go up, we struggle to raise funds to buy products. When prices come down, the costs we incurred remain. If we bought fuel at ₦1,210, it is difficult to sell at ₦1,209 because we still need enough money to replenish our stock.”

Gillis-Harry dismissed claims that fuel marketers deliberately keep petrol prices high or operate as a cartel to maximize profits. According to him, assumptions that marketers intentionally resist price reductions are inaccurate and fail to account for the realities of the downstream petroleum sector.

Financial pressures on fuel retailers

He stressed that PETROAN’s primary responsibility is to ensure that filling stations remain adequately supplied, dispense the correct quantities of fuel, and maintain approved quality standards as regulated by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).

The association’s president noted that while marketers may not always achieve their projected profit levels, they must generate enough revenue to cover operational expenses and remain in business. Gillis-Harry also highlighted the financial pressures facing fuel retailers, noting that many operators depend on loans to purchase petroleum products. He said the high cost of borrowing and limited access to affordable financing continue to affect the sector.

He explained that when petrol prices rise sharply after purchases have already been made, retailers must find extra capital to replace their stock, often at significantly higher costs. Securing such funds from financial institutions, he said, is neither easy nor cheap.

PETROAN calls for energy bank and more refineries

As a solution, PETROAN renewed its call for the establishment of a dedicated Nigerian energy bank that would provide downstream operators with access to single-digit interest loans. Gillis-Harry praised the operations of the Dangote Refinery, saying the facility has improved local fuel supply and reduced dependence on imported petroleum products. However, he argued that a single refinery cannot meet the country's long-term energy needs and called for the establishment of additional refining facilities to promote competition in the market.

For Nigerian consumers and businesses, the immediate outlook means pump prices will remain elevated until retailers clear their old stock purchased at higher rates. Lower prices at the filling station may only come after marketers have fully recovered their costs and secured cheaper supply from local refineries or imports.