The Federal Government has announced that NNPC Retail will forgo its profit margin and sell petrol at cost for the next 30 days to cushion the impact of global crude oil price shocks on households.
The measure was announced on Thursday by the Finance Minister and Coordinating Minister of the Economy, Taiwo Oyedele, in a statement issued by the Presidency.
According to the statement signed by Special Adviser to the President on Information and Strategy, Bayo Onanuga, the decision means if NNPC’s landing cost is N1,300 per litre, it will sell at the same price, particularly to commercial vehicles.
Oyedele said NNPC Retail already sells at the lowest price in the market and expressed hope that other marketers would take a cue, as the current spike in crude and petrol prices is not expected to last long.
The minister was emphatic that the discount must not be misinterpreted as the restoration of petrol subsidy, which he said ended on May 29, 2023.
Oyedele also disclosed that the Federal Government is negotiating a ceiling of N1,350 per litre on the ex-gantry or landing cost of petrol to keep pump prices stable.
Under the arrangement, where costs rise above the ceiling, refiners and importers will carry the shortfall and recover it later when crude prices or exchange rates allow, without breaching the ceiling.
“This is neither a subsidy nor a price control: it is designed to smooth prices over time rather than suppressing them,” Oyedele said.
“The reasoning is simple. 1,400 naira a litre today and 1,400 tomorrow is better than 1,500 today and 1,300 tomorrow, because volatility itself adds to uncertainty and cost. And when fares rise sharply, they rarely fall as fast. The ceiling will be reviewed monthly, reset as costs require, and the figures published for transparency.”
The government also announced forward sales of crude to domestic refineries. As production rises and previously committed crude is freed up, this is expected to shield pump prices from global volatility.
Other measures announced include:
Faster CNG rollout: Scaling up Compressed Natural Gas deployment with states. Government says CNG is 60-70 per cent cheaper than petrol and expects transporters to pass savings to passengers.
Check on road taxes: Reining in collection of road taxes and levies by states and security agencies that inflate fares and logistics costs, under the 2025 tax reform laws.
Cash transfers and credit: Increased funding for cash transfers to vulnerable households and subsidised credit for small businesses.
Excess profit tax: Consideration of an excess profit tax for operators who take undue advantage of consumers. Proceeds will be used for transport support or vouchers for urban minimum-wage earners. Government will also work with National Assembly for enhanced tax relief for low-income earners under the 2027 Finance Bill.
Cutting red tape: Reducing regulatory costs that feed into cost of doing business.
National strategic fuel reserve: Investing in a reserve to release refined products under published rules when global disruption or hoarding threatens supply. “This is not a subsidy, and it does not fix prices; rather, it secures supply and reduces price volatility.”
Traffic and logistics: Improving traffic flow in major urban centres to reduce fuel consumption and using NIPOST’s newly launched address codes to make logistics cheaper.
The Presidency said none of the measures restores a blanket subsidy, which it said would cause long-term harm.
“Removing the fuel subsidy came at a price. But the alternative has been tried. Nigeria has already lived through that cycle: scarcity, smuggling, a collapsing currency and a fiscal crisis. We cannot afford to live through it again,” the statement said.
It added that the government is working on a comprehensive package of fiscal measures to bring inflation down to single digits in the near term.
