The Federal Government has unveiled measures to shield Nigerians from rising petrol prices, including negotiations to cap the fuel landing cost at N1,350 per litre and a 30-day decision by the Nigerian National Petroleum Company Limited to forgo its retail profit margin.
A statement issued by the Special Adviser to the President on Information and Strategy, Mr. Bayo Onanuga, on Thursday, said under the proposed arrangement, refiners and importers would temporarily absorb costs above the ceiling and recover the shortfall when crude oil prices or exchange rates become more favourable, in a move aimed at moderating domestic fuel price volatility.
Minister of Finance and Coordinating Minister of the Economy, Mr. Taiwo Oyedele, announced the measures alongside other interventions designed to ease the pressure of rising energy costs on households and businesses.
Oyedele said NNPC Retail would sell petrol at cost for the next 30 days, with President Bola Ahmed Tinubu backing the initiative to cushion the impact of global crude oil price shocks, particularly on vulnerable households and commercial transport operators.
He explained that the arrangement meant NNPC Retail would sell petrol at its landing cost without adding a retail profit margin; for instance, if the landing cost stood at N1,300 per litre, the company would sell at the same price.
The minister expressed hope that other fuel marketers would emulate the initiative, noting that the current surge in crude oil and petrol prices was not expected to persist for long.
He, however, cautioned against interpreting the intervention as a return to petrol subsidy, which the Federal Government abolished on May 29, 2023.
According to him, the proposed landing-cost ceiling is intended to smooth out price fluctuations rather than impose permanent price controls or suppress market prices.
“This is neither a subsidy nor a price control: it is designed to smooth prices over time rather than suppressing them,” Oyedele said.
He explained that maintaining a relatively stable price would provide greater certainty for households and businesses than allowing sharp increases followed by unpredictable reductions.
The proposed ceiling would be reviewed monthly, with adjustments made as economic conditions required. The government also pledged to publish the relevant figures to promote transparency.
As part of efforts to strengthen domestic supply and reduce exposure to international market shocks, the government is introducing forward sales of crude oil to local refineries.
The arrangement is expected to improve crude availability as production increases and previously committed volumes become available.
The government is also accelerating the rollout of compressed natural gas-powered transportation in collaboration with state governments, with the expectation that operators would pass the lower fuel costs on to passengers through reduced fares.
Oyedele said compressed natural gas was between 60 and 70 per cent cheaper than petrol.
Other interventions include increased funding for cash transfers to vulnerable households, subsidised credit for small businesses and consumers, and efforts to curb road taxes and levies that raise transportation and logistics costs.
The government is also considering an excess-profit tax on operators found to be exploiting consumers across the energy value chain.
Proceeds from such a tax would be dedicated to cushioning the impact of higher fuel prices, including through transport support or vouchers for urban minimum-wage earners.
It also plans to work with the National Assembly to consider additional tax relief for low-income earners under the 2027 Finance Bill.
In a further measure to guard against future energy shocks, the Federal Government said it was investing in a National Strategic Fuel Reserve.
Under the proposed framework, refined petroleum products would be released into the market according to clearly defined and publicly available rules whenever global supply disruptions or hoarding threaten availability and price stability.
The government said the reserve would help prevent artificial scarcity, discourage market manipulation and strengthen long-term energy security without reintroducing fuel subsidies or fixing market prices.
The Presidency acknowledged the hardship Nigerians continue to face amid high fuel prices but maintained that reversing the subsidy removal would expose the country to renewed fiscal and economic difficulties.
“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 Presidency said.
It added that the objective was to ensure that the benefits of economic reforms reached more Nigerians through targeted interventions rather than a blanket subsidy.
The government also disclosed that it was working on a comprehensive package of fiscal measures aimed at sustainably reducing inflation to single digits in the near term.
