By Seun Ibiyemi
The Major Energy Marketers Association of Nigeria (MEMAN) has explained why petrol prices in Nigeria tend to rise quickly but decline more slowly, citing cost recovery pressures, inventory dynamics and global market volatility as key factors.
Speaking during a MEMAN webinar on Tuesday, the association’s Chairman, Hubb Stokman, said the trend reflects broader global market behaviour and is not unique to Nigeria.
According to him, when fuel prices surge, marketers are often forced to adjust pump prices immediately to maintain operations and secure working capital for future supply.
“When prices go up, especially rapidly, dealers need to quickly generate the working capital to buy the next truck. And you only do that by reflecting the price increases at the pump,” he said.
Stokman noted that marketers who delay price adjustments risk running out of stock, which could disrupt fuel supply across the country.
Read also:FG vows decisive action as Maiduguri bomb blast death toll tops 20
However, he explained that when prices begin to drop, the adjustment is usually slower because marketers must first sell off existing inventory purchased at higher costs.
He added that gradual price reductions also help stabilise the market and prevent sharp fluctuations that could confuse consumers and disrupt planning.
“This approach creates what is sometimes called a ‘parachute,’ ensuring prices don’t swing sharply up and down,” he said.
The MEMAN chairman further pointed out that global factors, including geopolitical tensions such as crises in the Middle East, can amplify price volatility and make fluctuations more noticeable.
He emphasised that Nigeria’s downstream sector is deregulated, meaning petrol prices are largely influenced by international oil benchmarks and foreign exchange movements.
Also speaking, energy expert Joe Nwakwue said Nigeria remains highly exposed to global oil price movements, particularly changes in Brent crude.
“Whatever happens anywhere in the world that impacts Brent crude will be transmitted directly to the domestic market,” he said.
Nwakwue noted that while policies like the naira-for-crude initiative may reduce exposure, Nigeria’s reliance on global pricing structures means external shocks will continue to affect local fuel prices.
He stressed the need for a competitive and contestable market, adding that allowing fuel imports remains critical to ensuring fair pricing and preventing monopolistic distortions.
“My personal view is that at all times, the only way today that you can have a contestable market is that you continue to allow imports,” he said.
The explanation comes amid growing public concern over persistent fuel price fluctuations, with stakeholders calling for clearer policies and measures to cushion the impact on consumers.
