The Federal Government has announced a 30-day discount on petrol sold by the Nigerian National Petroleum Company Limited (NNPCL) as part of measures aimed at reducing the impact of high fuel prices on Nigerians and stabilising pump prices.
The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, announced the measure on Thursday at a press briefing on petrol prices and subsidy-related issues in Abuja.
Oyedele said the discount would initially run for 30 days, with public transport operators given priority under the arrangement.
He stressed that the initiative should not be regarded as a return to petrol subsidy, explaining that the government would instead provide petrol at cost during the period.
“We are offering a discount on petrol dispensed by NNPC Limited for the next 30 days in the first instance, with priority for public transporters nationwide. So, it’s not a subsidy, government is just saying we sell to you at cost,” Oyedele said.
The minister also disclosed that the Federal Government was negotiating a ceiling of ₦1,350 per litre on the ex-gantry or landing cost of petrol as part of a proposed price modulation mechanism.
He explained that the proposed ceiling was not a directive that petrol must sell for ₦1,350 per litre at filling stations.
Rather, he said the mechanism was designed to prevent sudden movements in international crude oil prices or the foreign exchange market from being immediately transferred to consumers through corresponding increases in pump prices.
According to Oyedele, the government is seeking to make petrol prices more predictable by reducing the effect of market volatility on households and businesses.
“Pump prices should not have to follow every swing in global crude or the exchange rate,” he said, adding that the government was negotiating a ₦1,350-per-litre ceiling on the ex-gantry or landing cost of petrol to promote price stability.
Under the proposed arrangement, Oyedele said refiners and importers would initially absorb any difference if the actual cost of petrol rises above the agreed ceiling.
They would subsequently recover the shortfall when market conditions improve, according to the minister.
He maintained that the arrangement would neither amount to a subsidy nor constitute price control, but would instead provide a mechanism for smoothing out fluctuations in petrol prices over time.
Oyedele illustrated the rationale by comparing a relatively stable price with sharp fluctuations.
He said maintaining petrol at ₦1,400 per litre today and tomorrow could be preferable to having it rise to ₦1,500 one day and fall to ₦1,300 the next, because frequent price swings create uncertainty and additional costs for households and businesses.
The minister said the proposed ceiling would be reviewed monthly, with the relevant figures published to promote transparency.
He explained that the government was introducing the additional measures because existing interventions had not completely addressed the economic pressure facing households and businesses following increases in fuel and transportation costs.
The latest announcement comes amid continuing concerns over the impact of petrol prices on transportation, food prices, household expenses and business operating costs.
By prioritising public transport operators under the 30-day discount, the Federal Government is seeking to ease some of the pressure that fuel costs place on transportation and, indirectly, on the wider economy.
The government is expected to provide further details on the implementation of the discount and the proposed price modulation mechanism as discussions with refiners and importers progress.
Oyedele said the monthly review and publication of the relevant figures would allow Nigerians to monitor the operation of the arrangement and understand how changes in market conditions affect petrol pricing.
The Federal Government’s position remains that the new measures are intended to cushion consumers from excessive price volatility without returning to the petrol subsidy regime it has previously said it wants to avoid.
