The Nigerian downstream petroleum industry is in turmoil as the Federal Government struggles to maintain fuel subsidies amid rising petrol import costs. Industry experts suggest a potential increase in pump prices to around N1,000 per liter to help the government, particularly the Nigerian National Petroleum Company Limited (NNPCL), manage its outstanding debts. The current landing cost of petrol is around N1,200 per liter, with total pump costs potentially reaching N1,405 per liter, leading to severe fuel scarcity and long queues at petrol stations.

NNPCL is overwhelmed by subsidy costs, and its financial strain is affecting its ability to continue importing fuel and remit taxes to the government. With subsidy payments reaching unsustainable levels, the company is unable to maintain cash flow and may cease fuel imports altogether. The government is expected to announce a new pump price soon.

Meanwhile, marketers are hesitant to import fuel due to high costs and foreign exchange issues, though they are willing to do so if supported by the government. The Dangote Refinery is beginning petrol production, which may alleviate some of the supply issues. Experts urge the government to collaborate with local refineries and fully implement the Petroleum Industry Act (PIA) to stabilize the sector. Transport costs are rising due to fuel scarcity, further burdening citizens.