The Presidency has dismissed suggestions that the Federal Government’s decision to offer a 30-day petrol price relief arrangement amounts to a return to fuel subsidy, insisting that the initiative is designed to cushion Nigerians against rising global oil prices.
The Federal Government had announced on Thursday that the Nigerian National Petroleum Company Limited (NNPCL) would temporarily forgo its retail profit margin and sell petrol at cost as part of efforts to ease the financial pressure on households and businesses.
The arrangement, backed by President Bola Tinubu, was among several measures unveiled by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, to mitigate the impact of rising crude oil and petrol prices.
In a statement issued on Thursday by the President’s Special Adviser on Information and Strategy, Bayo Onanuga, the Presidency said NNPC Retail would implement the initiative within 30 days.
Under the arrangement, the national oil company would sell petrol at its landing cost without adding its retail profit margin.
The statement explained that if NNPCL’s landing cost for petrol stood at N1,300 per litre, the company would sell the product at the same price, particularly to support commercial transport operators.
The Presidency said the initiative was intended to provide temporary relief to Nigerians amid fluctuations in the international oil market, rather than reinstate the petrol subsidy regime abolished on May 29, 2023.
Oyedele, while briefing journalists, expressed the government’s expectation that other fuel marketers would adopt a similar approach, noting that the current surge in crude oil and petrol prices was not expected to persist indefinitely.
The Federal Government is also negotiating a price ceiling of N1,350 per litre on petrol’s ex-gantry or landing cost as part of efforts to moderate pump price fluctuations.
According to the government, refiners and importers would bear costs exceeding the agreed ceiling and recover the difference later when crude oil prices or foreign exchange conditions improve.
Oyedele said the arrangement was neither a subsidy nor a price control mechanism, but an attempt to smooth out price fluctuations and provide greater predictability for consumers and businesses.
He explained that maintaining relatively stable prices over time would be preferable to sharp increases and subsequent reductions, particularly because transport fares often rise quickly when fuel prices increase but are slow to fall when prices decline.
The proposed ceiling would be reviewed monthly, with adjustments made according to prevailing costs and the figures published to promote transparency.
As part of the broader intervention, the Federal Government also plans to sell crude oil to domestic refineries through forward contracts, a move expected to reduce their exposure to global price volatility as local production increases.
The government said it was working with state governments and security agencies to curb road taxes and other levies that contribute to rising transport fares and logistics costs.
It also plans to increase funding for cash transfers to vulnerable households and provide subsidised credit to small businesses and consumers.
Other measures include expanding the deployment of compressed natural gas (CNG) as a cheaper alternative to petrol.
The Presidency said CNG was between 60 and 70 per cent cheaper than petrol and expressed the expectation that transport operators would pass the resulting savings on to passengers through lower fares.
The government is also considering an excess-profit tax on operators found to be taking undue advantage of consumers across the energy value chain.
According to the statement, proceeds from the proposed measure would be used exclusively to cushion fuel costs through transport support or vouchers for urban minimum-wage earners.
The Federal Government further disclosed plans to work with the National Assembly on additional tax relief for low-income earners under the 2027 Finance Bill.
Other interventions include reducing regulatory costs that contribute to the cost of doing business and investing in a reserve of refined petroleum products that could be released into the market when global disruptions or hoarding threaten supply and price stability.
The government also plans to improve traffic management in major cities to reduce fuel consumption and leverage the Nigerian Postal Service’s newly introduced address codes to make logistics operations more efficient.
Reiterating its position, the Presidency maintained that the measures would not reverse the removal of petrol subsidy or introduce blanket price controls.
It argued that reinstating the subsidy would create long-term economic difficulties despite offering temporary relief to consumers.
The Presidency acknowledged that subsidy removal had imposed significant hardship on Nigerians but maintained that returning to the previous system could revive fuel scarcity, smuggling, currency instability and fiscal pressures.
It said the government remained committed to ensuring that the benefits of its economic reforms reached more Nigerians through practical interventions.
The statement added that the Federal Government was developing a comprehensive fiscal package aimed at sustainably reducing inflation to single digits in the near term.
