A government policy meant to lower fuel costs has triggered warnings of a potential breakdown in Liberia's petroleum supply chain, with operators cautioning that the September 2025 pricing circular will push companies into insolvency and leave the country dependent on a single state-run supplier.
The circular, which cut storage fees from US$0.35 to US$0.05 per gallon--an 86 percent reduction--was intended to deliver relief at the pump. Instead, terminal owners say the move has increased local fees by US$0.07 per gallon, threatening to bankrupt companies that have invested more than US$300 million in depots, port facilities, and fueling infrastructure.
"This is not just unfair--it is unworkable," one terminal owner told the Daily Observer. "No operator can sustain operations, service debt, and pay employees at this rate. It will drive companies into insolvency."
Industry leaders warn that if operators collapse, Liberia's entire fuel supply chain could be disrupted. Petroleum is the backbone of transportation, electricity generation, and basic commerce in Liberia. A weakened supply chain, they caution, could mean fuel shortages, idle trucks, and strain on hospitals, schools, and businesses. "This is not about profits," another operator said. "It is about keeping Liberia moving."
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Over the past decade, petroleum terminal owners have collectively invested more than US$300 million in critical infrastructure, much of it financed through multi-year loans from local and international banks. These loans were approved on the basis of government-sanctioned pricing formulas that included storage and financing costs. By removing these elements, the circular exposes operators to default risks, creating what one banker described as a "systemic threat" to repayment schedules.
"If this circular is not revised, banks will begin recalling loans, and Liberian-owned companies will be the first to collapse," an operator warned. "That will mean job losses, idle infrastructure, and a weakened petroleum supply chain."
The exclusion of financing costs has drawn particular criticism. Liberia's borrowing environment is already among the most expensive in West Africa, with interest rates that make commodity trading heavily reliant on credit. "Commodity trading anywhere in the world requires financing," a stakeholder explained. "Removing financing costs is commercially unrealistic and makes operations impossible. This alone could push companies out of the market."
Adding to the controversy is the dual role of the Liberia Petroleum Refining Company (LPRC), which acts as both regulator and competitor. Terminal owners argue that the company has consistently used its position to tilt policies in its favor. "You cannot be both referee and player," one operator said. "Every adjustment squeezes private operators while consolidating state control."
The LPRC has defended the circular, saying it will keep petroleum prices low for consumers. But terminal owners counter that pump prices are determined by international benchmarks, particularly Platts, in coordination with importers and the Ministry of Commerce. "If LPRC truly wants to prove it can lower costs, then open the market and let all players compete," one operator challenged. "The Liberian people will see who is really offering the best prices."
Critics also rejected LPRC's claim that most terminal owners have already paid off their bank loans. Operators insist that all companies still carry obligations structured around the previous pricing formulas. "These are multi-year loans," one said. "Changing the rules now undermines the repayment structures that banks relied on to lend us the money."
Analysts say the broader danger lies in the precedent set by the circular. Sudden regulatory shifts in petroleum--a sector so vital to daily life--send a troubling signal to investors in other industries. "This policy tells investors that the rules can change overnight and always against them," a petroleum importer said. "It amplifies Liberia's already fragile financing profile and threatens broader economic growth."
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Terminal owners have appealed directly to President Joseph Boakai, the Legislature, and the Ministry of Commerce to step in before the sector unravels. They stress that the issue goes beyond the survival of individual businesses. "This is about jobs, economic stability, energy security, and investor confidence," an industry leader emphasized. "If the government wants Liberia to attract investment, it must create a fair and predictable environment."
As the standoff continues, terminal owners warn that without urgent revision, Liberia could face a future of company closures, reduced competition, higher consumer prices, and dependence on a single state-run operator. "This is a defining moment," they concluded. "The government must decide whether it wants a competitive, investor-friendly petroleum sector or a state-controlled monopoly that could ultimately fail the Liberian people."
