Says New Pricing Circular Threatens Industry Survival
Monrovia, Liberia – The September 2025 petroleum pricing notice, which private terminal owners claim could bankrupt their companies and wipe off over $300 million in investments, has thrown Liberia’s petroleum industry into a crisis.
Terminal owners have united in their demand that the government act immediately to address the issue, stating that the strategy not only puts their survival in danger but also runs the risk of undermining investor confidence and the country’s energy security.
The storage charge was slashed by 86 percent, from $0.35 per gallon to $0.05 per gallon, as a result of the communication. Industry stakeholders claim that despite the measure’s declared goal of lowering consumer pump prices, it has instead raised local fees by $0.07 per gallon.
According to a terminal owner, this is not just unfair, but also impractical. He noted that at this rate, no operator can pay staff, service debt, and maintain operations. “It will force businesses to go bankrupt.”
In the past ten years, the owners of petroleum terminals in Liberia have invested more than US$300 million in port infrastructure, depots, fuelling stations, and transportation systems throughout the country. Reputable domestic and foreign institutions provided loans for a large portion of investment.
“These loans were authorized based on the government’s pricing formula, which included financing costs and storage fees,” the owners claimed. The policy’s sudden removal of these crucial elements puts them at immediate risk of defaulting to creditors they added.
“Banks would start revoking loans if this circular is not changed, and Liberian-owned businesses will be the first to fail. Jobs will be lost, infrastructure will be idle, and the supply chain will be weakened,” another operator cautioned.
Another major concern is the removal of financing costs from the pricing formula. In Liberia, where interest rates and borrowing costs are among the highest in West Africa, this exclusion is seen as a fatal blow.
“Commodity trading anywhere in the world requires financing,” one stakeholder explained. “Removing financing costs is commercially unrealistic and makes operations impossible. This alone could push companies out of the market.”
Terminal owners also raised alarms over what they describe as a systemic conflict of interest created by the Liberia Petroleum Refining Company’s dual role as both regulator and competitor. They argue that since becoming a participant in the market, LPRC has continuously changed regulations to support its own business practices while affecting individuals who are private investors.
“You cannot be both referee and player. Every adjustment they make squeezes private operators while consolidating their own power,” Liberian terminal owners emphasized.
Liberia already has one of the highest financial risk profiles in the region, which makes capital scarce and expensive. Leaders in the private sector worry that the September directive will worsen investor trust, deter capital inflows, and frustrate attempts by returning Liberian business owners to support the economy.
“This policy tells investors that the rules can change overnight and always against them. It threatens wider economic growth and worsens Liberia’s already difficult financing situation.”
The approach has been defended by the LPRC, which says it will help keep consumer prices for petroleum low. However, terminal owners oppose this, stating that the Ministry of Commerce and importers collaborate with LPRC to determine pricing, which are set by worldwide benchmarks (Platts).
A terminal operator posed the challenge, saying, “Open the market and let all players compete if LPRC really wants to prove it can lower costs. Liberians will decide who is actually providing the best deals.”
LPRC has also claimed that most terminal owners have already paid off their bank loans. Terminal operators dismissed this as false and misleading, stressing that all operators still carry obligations to international and local banks.
According to one operator, these are multi-year loans that were being paid back using formulae that were allowed by the government. “Changing the rules now undermines the very repayment structures that banks relied on to lend us the money.”
Now, terminal owners are calling on the Ministry of Commerce, the Legislature, and President Joseph Boakai’s administration to step in to keep the industry from collapsing.
“This is about more than just businesses. It concerns investor confidence, jobs, economic stability, and energy security. The government must establish a stable and equitable climate if it hopes to draw in foreign investment. The economy cannot be built on shifting regulations that favor one party over another,” a prominent figure in the industry stressed.
The owners of the petroleum terminals advised that if the notification is not revised immediately, Liberia may have to deal with business shutdown as well as a future with less competition, higher consumer prices, and a reliance on a single state-run organization.
They said, “This is a crucial time.”The government must determine whether it supports a state-controlled monopoly that will ultimately fail the Liberian people or a competitive, investor-friendly petroleum sector.”
Reported by: Prince Saah
