Subscribe: Gist E-Paper
The Presidency has defended the Federal Government’s 30-day petrol discount programme, insisting that the measure does not amount to a return of the fuel subsidy removed in May 2023.
Under the arrangement, the Nigerian National Petroleum Company Limited (NNPCL) will forgo its retail profit margin and sell petrol at cost to cushion households and businesses against rising global crude oil prices.
The Special Adviser to the President on Information and Strategy, Bayo Onanuga, disclosed this in a statement issued on Thursday, following the announcement of additional measures by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele.
According to the statement, NNPC Retail, which currently sells petrol at relatively competitive prices, will implement the arrangement for 30 days.
“This means if NNPC’s landing cost is N1,300, it will sell fuel to Nigerians, especially commercial vehicles, at the same price,” the statement said.
Oyedele said the Federal Government hoped other fuel marketers would adopt a similar approach, noting that the recent surge in crude oil and petrol prices was not expected to persist for long.
The government is also negotiating a ceiling of N1,350 per litre on petrol’s ex-gantry or landing cost as part of efforts to moderate pump prices and protect consumers from sudden increases.
Under the proposed arrangement, refiners and importers would bear costs above the ceiling and recover the difference later when crude oil prices or exchange rates become more favourable.
Oyedele explained that the policy was designed to moderate price fluctuations rather than impose price controls.
He said maintaining a relatively stable price would help households and businesses plan their expenses, adding that transport fares often rise sharply when fuel prices increase but do not fall as quickly when costs decline.
The proposed price ceiling would be reviewed monthly, with adjustments made according to prevailing costs and the figures published for transparency.
The Federal Government also plans to sell crude oil forward to domestic refineries to reduce their exposure to global price volatility and support more stable domestic fuel supply.
Other measures include strengthening enforcement against road taxes and levies that increase transport and logistics costs, expanding cash transfers to vulnerable households and providing subsidised credit to small businesses and consumers.
The government is equally scaling up the deployment of compressed natural gas (CNG) in collaboration with state governments, with transport operators expected to pass the resulting savings on to passengers through lower fares.
According to the Presidency, CNG is between 60 and 70 per cent cheaper than petrol.
The statement added that the government would consider an excess-profit tax on operators found to be exploiting consumers across the energy value chain.
Proceeds from the proposed tax would be dedicated to cushioning fuel-related costs through transport support or vouchers for minimum-wage earners in urban areas.
The Federal Government also intends to work with the National Assembly to introduce enhanced tax relief for low-income earners through the 2027 Finance Bill.
Additional interventions include reducing regulatory costs that contribute to the prices of goods and services, improving traffic management in major cities to cut fuel consumption and using newly introduced NIPOST address codes to make logistics more efficient.
The government is also developing a reserve of refined petroleum products that could be released into the market under published guidelines whenever global disruptions or hoarding threaten supply and price stability.
The Presidency maintained that the measures were not a restoration of the blanket fuel subsidy or an attempt to fix prices, but were intended to improve supply, discourage artificial scarcity and reduce the impact of market volatility on Nigerians.
It warned that returning to a general fuel subsidy could recreate the economic challenges associated with the previous system, including smuggling, pressure on the naira and fiscal instability.
“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,” the statement said.
The Presidency further disclosed that the Federal Government was working on a comprehensive package of fiscal measures aimed at sustainably reducing inflation to single digits in the near term.
