Independent petroleum marketers in Nigeria say intense competitors is squeezing their revenue margins and pushing motorists to prioritise cheaper petrol over brand loyalty.
In an unique chat with Nairametrics, Chinedu Ukadike, National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), mentioned motorists are prepared to queue for days at shops providing decrease costs.
The growth comes amid continued volatility within the downstream petroleum sector, rising product acquisition prices and better working bills. Marketers say they’re dealing with mounting monetary stress whilst pump costs enhance, with sudden price adjustments additionally exposing them to vital losses.
Petrol price war weakens brand loyalty
Ukadike mentioned revenue margins haven’t improved regardless of the rise in petrol costs as a result of marketers should maintain their costs aggressive to draw clients.
- “The margin has not improved now. It has not improved as a result of principally you might be in a aggressive period, so you possibly can’t speak about large margin, you place small to promote in order that different folks round you’ll not help you.
- “You will now use the price now to draw clients not brand.
- “It’s not a brand anymore. Anywhere the commuters see that the product is very cheap and low, they will queue up, they don’t care. They can spend three days to be able to buy it. So, it’s no longer a brand.”
Another oil marketer, Philip Bulus, mentioned the rise in petrol costs has not essentially translated into larger earnings as a result of the price of buying merchandise and working filling stations has additionally risen.
- “Since the increase in petrol prices, our profit margins have come under pressure. Although the selling price per litre has increased, that does not automatically mean we are making more profit. Our cost of purchasing petrol has also gone up, alongside transportation, logistics, electricity, staff salaries and other operating expenses.”
Bulus added that restocking now requires considerably extra capital, whereas customers have gotten extra cautious about how a lot petrol they purchase. He additionally warned that marketers who buy merchandise at excessive costs threat losses if market costs fall earlier than they promote their inventory.
Rising prices squeeze petrol marketers
Bulus mentioned marketers are adopting a number of methods to handle working prices and stay aggressive within the present market.
- “The first strategy is effective cash flow management. In this business, you need sufficient capital to purchase products and keep your station running. We therefore have to plan our purchases carefully and ensure that money is available for restocking rather than tying up too much capital in other expenses.”
He mentioned marketers are additionally specializing in decreasing pointless bills, retaining clients and monitoring rivals’ costs and adjustments in provide prices.
- “Second, we pay shut consideration to our working prices. We search for methods to cut back pointless spending on logistics, electrical energy, gear upkeep and different bills with out compromising security or the standard of our providers.
- “Third, we concentrate on buyer retention. We attempt to provide dependable merchandise, correct measurements, good customer support and constant availability. When clients belief your station, they’re extra more likely to return, even when one other station is providing a barely decrease price.
- “We also monitor competitors’ prices and changes in supply costs. We cannot simply increase our pump price whenever our expenses rise because customers may move to another station. At the same time, selling below a sustainable level can lead to losses.”
Bulus mentioned the survival of marketers will depend on balancing costs, gross sales volumes, working prices and buyer loyalty. He added that whereas pump costs affect customers’ alternative of filling station, brand fame and placement additionally matter.
Meanwhile, Ukadike has maintained that unbiased marketers don’t obtain credit score provides from refineries or petroleum importers, including to their financing challenges.
What you must know
In March 2026, Nairametrics reported that oil marketers had raised concerns concerning the impression of rising petrol costs linked to the continuing Middle East battle on their companies.
The marketers mentioned the rise in pump costs had raised the amount of cash required to buy a truckload of petroleum merchandise, whereas returns remained low and doubtlessly inadequate to cowl the excessive rates of interest on financial institution loans.
They additionally reported a big drop in demand, with some clients who beforehand bought 20,000 litres or 10,000 litres decreasing their orders to about 2,000 litres or 1,000 litres.
The marketers defined that petrol pricing is influenced by substitute prices, which means they need to take into account the price of acquiring their subsequent provide when setting pump costs.
They warned that persevering with to promote at outdated costs when substitute prices have elevated may erode the capital wanted to buy new provides and doubtlessly result in shortages.
