Independent petroleum marketers in Nigeria say intense competition is squeezing their profit margins and pushing motorists to prioritise cheaper petrol over brand loyalty.
In an exclusive chat with Nairametrics, Chinedu Ukadike, National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), said motorists are willing to queue for days at retail outlets offering lower prices.
The development comes amid continued volatility in the downstream petroleum sector, rising product acquisition costs and higher operating expenses. Marketers say they are facing mounting financial pressure even as pump prices increase, with sudden price changes also exposing them to significant losses.
Ukadike said profit margins have not improved despite the increase in petrol prices because marketers must keep their prices competitive to attract customers.
Another oil marketer, Philip Bulus, said the increase in petrol prices has not necessarily translated into higher profits because the cost of purchasing products and running filling stations has also risen.
Bulus added that restocking now requires significantly more capital, while consumers are becoming more cautious about how much petrol they buy. He also warned that marketers who purchase products at high prices risk losses if market prices fall before they sell their stock.
Bulus said marketers are adopting several strategies to manage operating costs and remain competitive in the current market.
He said marketers are also focusing on reducing unnecessary expenses, retaining customers and monitoring competitors’ prices and changes in supply costs.
Bulus said the survival of marketers depends on balancing prices, sales volumes, operating costs and customer loyalty. He added that while pump prices influence consumers’ choice of filling station, brand reputation and location also matter.
Meanwhile, Ukadike has maintained that independent marketers do not receive credit supplies from refineries or petroleum importers, adding to their financing challenges.
In March 2026, Nairametrics reported that oil marketers had raised concerns about the impact of rising petrol prices linked to the ongoing Middle East conflict on their businesses.
The marketers said the increase in pump prices had raised the amount of money required to purchase a truckload of petroleum products, while returns remained low and potentially insufficient to cover the high interest rates on bank loans.
They also reported a significant drop in demand, with some customers who previously purchased 20,000 litres or 10,000 litres reducing their orders to about 2,000 litres or 1,000 litres.
The marketers explained that petrol pricing is influenced by replacement costs, meaning they must consider the cost of obtaining their next supply when setting pump prices.
They warned that continuing to sell at old prices when replacement costs have increased could erode the capital needed to purchase new supplies and potentially lead to shortages.
