The Major Energies Marketers Association of Nigeria (MEMAN) has publicly opposed the Federal Government's proposed ₦1,350-per-litre ceiling on petrol costs, warning that arbitrary price limits could distort competition without resolving the persistent supply and distribution challenges plaguing the downstream sector.
During its third-quarter press engagement held virtually on Thursday in partnership with S&P Global Energy, MEMAN argued that sustainable fuel price stability depends on addressing supply bottlenecks rather than imposing government-determined limits. The association instead called for transparent, market-driven pricing, improved logistics, and lower operating costs.
Why Price Caps May Fail According to MEMAN
MEMAN maintained that government-imposed price ceilings would not address the underlying challenges confronting Nigeria's downstream petroleum industry. The association stated, “Government arbitrary price caps are not the solution to petroleum market challenges,” advocating for transparent pricing, efficient distribution, and measures to reduce operating costs.
According to the marketers, a competitive market supported by predictable supply arrangements would provide a more sustainable solution than price restrictions that could discourage investment or disrupt product availability. The position comes amid growing concerns over rising petrol prices and their impact on Nigerian households and businesses.
FG's Proposed ₦1,350 Ceiling and Its Mechanism
The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, had earlier disclosed 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 exceeding the ceiling and recover the shortfall when market conditions improved.
Oyedele said the mechanism, which would be reviewed monthly, was designed to moderate price fluctuations rather than reinstate the petrol subsidy removed in May 2023. He described the proposal as price modulation, insisting that it was neither a subsidy nor conventional price control. However, questions remain over how suppliers would finance the additional costs and the conditions under which they would recover their losses.
Rising Fuel Costs Trigger Government Intervention
The proposal follows rising petrol prices linked to disruptions in international oil markets, putting additional pressure on consumers and businesses. The Federal Government also announced a 30-day petrol discount at Nigerian National Petroleum Company Limited (NNPCL) filling stations, prioritising public transport operators as part of efforts to cushion the impact.
For downstream operators, the success of the proposed ceiling will depend on transparent reimbursement arrangements, predictable pricing, and assurances that refiners and importers can continue supplying the market without accumulating unsustainable losses.
MEMAN Demands Better Supply Chain Coordination
Beyond pricing, MEMAN called for clearer bulk supply arrangements defining product access, pricing, delivery schedules, and contractual obligations. The association also urged improvements in inventory visibility, storage capacity, transport coordination, and contingency planning to strengthen the reliability of petroleum distribution.
MEMAN argued that non-discriminatory access to petroleum products and more efficient regulatory processes would encourage competition and improve supply security. The association commended the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) for progress in digitalising licensing, publishing market data, and promoting product quality and fair competition. It also stressed the need to enforce quality standards, ensure accurate measurements, and guarantee that consumers receive the quantities they pay for.
Domestic Refineries Remain Central to Supply Security
The engagement also examined developments in global and West African refined petroleum markets, with S&P Global Energy highlighting how geopolitical tensions, refining disruptions, and shifting supply patterns had contributed to price volatility. MEMAN advocated prioritising domestic refinery output while retaining imports to bridge supply gaps and respond to disruptions.
Achieving this, however, would require reliable production, transparent pricing, and effective coordination among refiners, importers, depot operators, and marketers. Ultimately, the disagreement highlights the challenge of protecting consumers while maintaining the commercial viability of Nigeria's deregulated downstream petroleum sector.
For MEMAN, lasting price stability will depend on competitive supply, predictable pricing, efficient logistics, and lower operating costs. Whether the Federal Government's proposed ceiling can achieve that balance without undermining supply remains a key question for the industry.
