The aftermath of the federal government’s decision to remove fuel subsidies two months ago continues to reverberate across the nation, causing significant changes for entrepreneurs.
With the government no longer shouldering the cost, the burden has shifted, resulting in a staggering increase in the price of petrol from N190 to a N617.
Filling station proprietors find themselves at the forefront of this economic shift, grappling with the task of adjusting their pricing structures to align with the new reality.
This adjustment has had a direct and notable impact on consumer behaviour, leading to a pronounced decrease in demand and subsequently, lower sales volumes.
A survey across the Federal Capital Territory paints a stark picture. While petrol remains available at most stations, the consumer landscape has transformed. Motorists, once accustomed to topping off their tanks, now approach the fuel pump with cautious consideration.
The era of brimming tanks has given way to a sentiment of prudent restraint, as full tank purchases are increasingly viewed as an avoidable luxury.
In a recent interview with Radio Nigeria, Mr. Ifelodun Ogunkoya, the manager of a fuel station, lamented the grim reality faced by the industry. He disclosed that patronage had plummeted by an astonishing 50% since the subsidy removal took effect.
The station’s daily operations, once humming with brisk sales, now stand as a testament to the far-reaching consequences of this policy shift.
Question: How can you access the general performance of sales since the removal of subsidy?
Answer: we used to sell out our stock within two days before, but now it takes a week and we still have the commodity. You will hardly see any driver filling up their tank, and if at all you see one, check the type of car, it will definitely belong to a government official, probably yahoo boys, politician or an influential person. The development is really scary.
Question: What impact has the removal of fuel subsidies have on the wages and benefits of the employees?
Answer: we used to sell out our stock within two days before, but now it takes a week and we still have the commodity. You will hardly see any driver filling up their tank, and if at all you see one, check the type of car, it will definitely belong to a government official, probably yahoo boys, politician or an influential person. The development is really scary.
Question: What impact has the removal of fuel subsidies have on the wages and benefits of the employees?
Answer: The impact is enormous, though it varies with filling stations, however, for us there is decrease in profits, which may in turn impact our ability to maintain wages and benefits at previous levels. we have tried to talk to our staff, but you know that they are also entering transport to work. several of our customers now buy fuel between N5, 000 and N10, 000 and this is below half tank considering the current price. Infact our regular customers are the Motor byck (Okada) riders.
Question: Has there been any job losses in the filling station as a result of fuel subsidy removal?
Answer: like i said earlier, sales had not been booming like before and since we have not been able to increase salary due to low sales, we have decided to retrench some of our staff, as you can see now, only two fuel pump is dispensing and with just two attendants. this is just to help us strike a balance instead of folding up. The specific impact on job losses would also depend on various factors such as; the overall financial health of the filling station, the level of competition, and the efficiency of operations.
Question: What measures will your filling station take to offset any financial losses caused by the removal of fuel subsidies?
Answer: Well It’s important to note that these actions may vary based on the specific circumstances and strategies of each filling station. Here are a few potential measures which we are planning and any station can take.
Diversify product offerings: The filling station could expand its offerings by including additional convenience store items such as snacks, beverages, automotive accessories, or even electric vehicle charging stations. This diversification can attract more customers and increase revenue.
Promote car services: Offering maintenance and repair services, such as oil changes, tire rotations, and car washes can help broaden the revenue streams and improve profitability.
Embrace alternative fuels: Expanding into alternative fuel options like compressed natural gas (CNG), liquefied petroleum gas (LPG), or electric vehicle charging points can tap into the growing market of environmentally conscious consumers. This diversification can mitigate losses from decreased traditional fuel demand.
Foster partnerships and collaborations: Collaborating with other businesses, such as car rental companies, delivery services, or ride-hailing platforms, can provide additional sources of revenue. By creating mutually beneficial partnerships, filling stations can tap into new customer segments and boost income. all of these is just to help one remain in business instead of folding up, as so many stations are already out of business.
The Independent Petroleum Marketers Association of Nigeria (IPMAN) sounded the alarm, revealing that a considerable number of filling station owners are being forced to put their businesses up for sale due to the challenging business environment in the wake of the petrol subsidy removal.
Over 40 IPMAN members in Oyo State alone have taken this step, while hundreds of others across the country are also contemplating the same move, Mr Okoronkwo, was quoted as saying.
The decision to sell off filling stations has become a pressing option for numerous IPMAN members, reflecting the challenges they face in sustaining operations.
As the senate probe delve deeper into the matter, stakeholders and industry players are eager to see what measures might be taken to address the situation.
