Yemisi Izuora
The Nigerian National Petroleum Company Limited (NNPC) has offered to forgo its petrol retail profit margin and sell to Nigerians at cost to cushion the impact of global crude oil price shocks and volatility on vulnerable households.
NNPC Retail, which already sells petrol at the lowest price in the market, will offer this new deal within the next 30 days. This means if NNPC’s landing cost is N1300, it will sell fuel to Nigerians, especially commercial vehicles, at the same price.
The company’s discount gesture, backed by President Bola Ahmed Tinubu, was among the raft of measures the Finance Minister and Coordinating Minister of the Economy, Taiwo Oyedele, announced today.
Oyedele said he hoped other marketers would take a cue from the NNPC, as the sharp rise in crude and petrol prices is not expected to last long.
Oyedele was emphatic that NNPC agreeing to sell at a discount must not be misinterpreted as the restoration of petrol subsidy, which ended on May 29, 2023.
In addition, Oyedele 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 market volatility.
Oyedele also said the Federal Government is negotiating a ceiling of N1,350 a litre on the ex-gantry or landing cost of petrol, to keep pump prices stable. Where costs rise above the ceiling, refiners and importers will carry the shortfall and recover it later, when crude prices or the exchange rate 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. 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,” Oyedele said.
Oyedele also said that, under the 2025 tax reform laws, the Federal government, in collaboration with the states and security agencies, is reining in the collection of road taxes and levies that inflate fares and logistics costs.
The Federal government is also increasing funding for cash transfers to the most vulnerable households and subsidised credit for small businesses and consumers.
Other measures announced:
A faster CNG rollout:
The federal government is scaling up CNG deployment with the states. The government expects transporters to pass the savings on to passengers in lower fares. CNG is 60-70 per cent cheaper than petrol.
An excess profit tax:
This will be considered for operators who take undue advantage of consumers, anywhere along the energy value chain. The government said it will use proceeds from taxes on price gouging exclusively to cushion the impact of fuel prices through transport support or vouchers for urban minimum-wage earners, who are most vulnerable. The Federal Government will also work with the National Assembly to consider enhanced tax relief for low-income earners under the 2027 Finance Bill.
Less red tape:
The Federal Government is cutting regulatory costs that feed into the cost of doing business and, indirectly, into higher prices of goods and services.
National Strategic Fuel Reserve:
To protect households and businesses from future energy shocks, the Federal Government is investing in a National Strategic Fuel Reserve. The government will release refined products into the market under clear, published rules whenever a global disruption or hoarding threatens supply and price stability. This is not a subsidy, and it does not fix prices; rather, it secures supply and reduces price volatility. It will prevent artificial scarcity, deter market manipulation, and anchor long-term energy security, so a deregulated market delivers stable growth rather than sudden price shocks.
Better traffic and logistics management:
Traffic management agencies will improve traffic flow, especially in major urban centres, to reduce fuel consumption. Also, NIPOST’s newly launched address codes will help make logistics more efficient and cheaper.
To be clear, none of these measures restores a blanket subsidy. Doing so would create longer-term harm for a short-term cure. Each measure is designed to reach the people who need help, without putting the wider economy at risk.
The Presidency acknowledged the challenges the people face over the high cost of fuel.
“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, least of all in response to a temporary disruption, and at the very moment the results of reform are gathering pace.”
“Government is not out to reverse a necessary reform designed to set our country on the path towards sustained prosperity. It is to ensure its gains reach more Nigerians, faster and in more tangible ways. That is our work, and we are committed to doing it.
“The Federal Government is also working on a comprehensive package of fiscal measures to bring inflation down to single digits sustainably in the near term.”