Oil marketers have raised concerns, explaining how frequent fuel price changes are disrupting their businesses.
President of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), Billy Gilly-Harris, expressed these concerns during an interview on Channels Television’s Business Morning on Tuesday.
According to him, the continuous price changes in recent weeks pose a serious threat to the survival of fuel retailers.
Gilly-Harris’ concerns come amid an ongoing price war between Dangote Refinery and the Nigerian National Petroleum Company (NNPC) Limited.
He said that following Dangote refinery’s announcement of a price cut by N65 at the ex-depot level, retail prices at its filling stations dropped from N925–N930 to N860 per litre. Shortly after, NNPC also reduced its retail price, intensifying competition between the two major players.
He said, “In our consistently weekly reviews, we discovered that the size of loss, and the possibility of most of us getting out of business is glaring at us in the face,” Gilly-Harris said.
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“Because in today’s Nigeria, we have collaborative efforts being made between all the stakeholders, and we reach out to one another to know how the businesses are doing.
“As much as we are making efforts to make sure that Nigerians have product affordability from our end as the last mile in the industry, we also want to stay afloat and liquid.
“The challenge we have is that we buy products at a price today, and before the close of business, the price has reduced. We thought there should be a mechanism by which prices are analysed and ensure it doesn’t impact negatively on the industry.
“I have always said that every business can only survive by making some minimal profits that are commensurate to the price of paying the cost of doing business.
“We are fully aware that the international prices of crude oil and other related expenses are also being reduced. But when we invest to buy products at, say, N880, we are not going to sell at that price. And if such products become reduced to N840, N850, N860 or even N870 per litre, it becomes challenging how we will be able to recover our costs.”
On price regulation in the downstream sector, Gilly-Harris noted that PETROAN members can either import products or buy from local refineries. However, he stressed that fuel retailers cannot continue selling at a loss.
He added,“Yes, we have been in the forefront of always implementing what stakeholders agree. We have the capacity to import our products. We also have the capacity to buy locally refined products. But we see that prices consistently shift up or down, and there is no clear business consultation on how this should be done.
”That is why we said the NMDPRA and the consumer protection agency should swing into action and be able to work together with other stakeholders so that we can be able to have a stable market and a stable price.”
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