The Nigerian National Petroleum Company Limited (NNPCL) will forgo its petrol retail profit margin and sell the product at cost for the next 30 days as the Federal Government moves to cushion Nigerians from rising global crude oil prices.
The Presidency said on Thursday that the intervention, backed by President Bola Tinubu, would particularly benefit vulnerable households and commercial transport operators.
Under the arrangement, NNPC Retail will sell petrol based on its landing cost. For instance, where the company’s landing cost is N1,300 per litre, it will sell at the same price without adding its retail margin.
Finance Minister and Coordinating Minister of the Economy, Taiwo Oyedele, who announced the measure, urged other fuel marketers to follow NNPC’s example, arguing that the current surge in crude oil and petrol prices was unlikely to persist.
He, however, stressed that the intervention should not be interpreted as a return to petrol subsidy, which was removed in May 2023.
The Federal Government is also negotiating a N1,350 per litre ceiling on the ex-gantry or landing cost of petrol as part of measures to limit sharp price fluctuations.
Oyedele said refiners and importers would absorb costs above the ceiling and recover the difference later when crude prices or exchange rates improve.
“This is neither a subsidy nor a price control: it is designed to smooth prices over time rather than suppressing them,” he said.
According to him, the ceiling will be reviewed monthly, adjusted when necessary and published to ensure transparency.
The government also announced plans for forward sales of crude oil to domestic refineries, which it said would provide refiners with greater certainty and shield pump prices from volatility in the international market.
Other measures include faster deployment of compressed natural gas (CNG), increased cash transfers to vulnerable households and subsidised credit for small businesses and consumers.
The government said CNG was between 60 and 70 per cent cheaper than petrol and expected transport operators to pass the savings to passengers through lower fares.
It also announced plans to consider an excess-profit tax on operators found to be exploiting consumers along the energy value chain.
The proceeds, according to the government, would be used exclusively to cushion fuel-price impacts through transport support or vouchers for urban minimum-wage earners.
The Federal Government also plans to work with the National Assembly on enhanced tax relief for low-income earners under the proposed 2027 Finance Bill.
It said regulatory costs that contribute to higher business and consumer prices would be reduced, while road taxes and levies that increase transportation and logistics costs would be tackled in collaboration with state governments and security agencies.
The government further announced plans to establish a National Strategic Fuel Reserve to protect the country against future energy supply disruptions.
Under the proposed system, refined petroleum products would be released into the market under published rules whenever global disruptions or hoarding threaten supply and price stability.
The Presidency said the reserve would not be used to fix petrol prices but to prevent artificial scarcity, discourage market manipulation and reduce the impact of sudden global shocks.
It also listed improved traffic management and the use of NIPOST address codes as measures expected to reduce fuel consumption and logistics costs.
The Presidency acknowledged the hardship associated with high petrol prices but maintained that the government would not reverse the fuel subsidy reform.
“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,” the statement said.
The government said the latest interventions were designed to ensure that the benefits of economic reforms reach Nigerians more quickly without returning the country to a blanket petrol subsidy.
It also said it was working on broader fiscal measures aimed at bringing inflation down to single digits sustainably in the near term.
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