Independent petroleum marketers in Nigeria say intensifying competition is compressing their profit margins and pushing motorists to choose cheaper petrol over established brands.
Chinedu Ukadike, National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), told Nairametrics that motorists are willing to queue for days at retail outlets offering lower prices.
The shift is occurring amid continued volatility in the downstream petroleum sector, rising product acquisition costs and higher operating expenses. Marketers say they face mounting financial pressure even as pump prices rise, with sudden price changes also exposing them to significant losses.
Ukadike said profit margins have not improved despite higher petrol prices because operators must keep prices competitive to attract customers.
"The margin has not improved now. It has not improved because basically you are in a competitive era, so you can’t talk about big margin, you put small to sell so that other people around you will not assist you," he said.
He added: "You will now use the price now to attract customers 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, said higher petrol prices have not automatically translated into higher profits because the cost of buying products and running filling stations has also 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 said restocking now requires significantly more capital, while consumers are becoming more cautious about how much petrol they buy. He warned that marketers who purchase products at high prices risk losses if market prices fall before they sell their stock.
