Petroleum products marketers have issued a warning that retail outlets are closing down operations due to the escalating cost of running their businesses. The concerns were raised during the National Executive Council meeting of the Natural Oil and Gas Suppliers Association of Nigeria (NOGASA) held in Abuja.
Marketers expressed dissatisfaction with the process followed by President Bola Tinubu in the removal of subsidies on petrol, citing a lack of pre-removal measures. They argued that operational refineries and resolutions on foreign exchange matters should have been in place before the removal of the petrol subsidy.
The marketers questioned the Federal Government’s effectiveness in addressing the illicit trading of dollars within the country.
During the meeting, NOGASA President, Mr. Benneth Korie, emphasized the significant pressure faced by the downstream sector. He highlighted that many stations were shutting down due to challenging operational conditions.
Korie stated, “Depot owners are so terribly affected by the increasing cost of crude and the exchange rate to the extent that many depots are practically deserted as their owners are unable to secure bank loans to fund their business due to high-interest rates.”
He further explained that banks were reluctant to guarantee funds release to stakeholders due to difficulties, instability, and rapidly fluctuating foreign exchange rates. Consequently, many depots are reportedly depleted or out of stock.
The dire situation also affects filling stations, making it exceedingly difficult for owners to secure funds for procuring products. Korie revealed that both independent and major marketers are facing severe challenges, leading to a daily increase in the closure of filling stations. Dealers are reportedly going out of business, with many others on the brink of bankruptcy due to their struggles in obtaining funds to fulfill orders for their stations.
