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The Federal Government has announced a 30-day discount on petrol dispensed by the Nigerian National Petroleum Company Limited (NNPCL), with public transport operators nationwide to receive priority under the temporary measure.
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Government is negotiating an ex-gantry price ceiling to reduce sharp fluctuations in petrol prices.
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Finance Minister Taiwo Oyedele says the discount is a cost-price measure, not a return to petrol subsidy.
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Government is also pursuing cash transfers, cheaper credit, CNG expansion and forward crude sales.
October 08, (THEWILL) – The Federal Government has announced a 30-day discount on petrol dispensed by the Nigerian National Petroleum Company Limited (NNPCL), with public transport operators nationwide to receive priority under the temporary measure.
Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, disclosed this on Thursday, while addressing a press conference in Abuja on the rising cost of petrol and renewed questions over the fuel subsidy regime.
Oyedele said the intervention was designed to cushion the impact of high petrol prices on public transport operators and, by extension, commuters who have faced rising transportation costs.
“We are offering a discount on petrol dispensed by NNPC for the next 30 days in the first instance, with priorities for public transporters nationwide”, he said.
The minister stressed that the measure should not be interpreted as a return to the petrol subsidy regime, which the Federal Government has repeatedly said is no longer sustainable.
“It is not a subsidy. Government is saying we will sell to you at cost price”, Oyedele added.
Petrol prices are currently averaging about ₦1,400 per litre, following a significant increase in international crude oil prices and its impact on domestic fuel costs.
FG Targets ₦1,350 Ex-Gantry Ceiling
In addition to the temporary discount, Oyedele announced that the government was negotiating a ceiling of ₦1,350 per litre on the ex-gantry, or landing, cost of petrol. He said the proposed arrangement was part of a price-modulation mechanism designed to prevent pump prices from immediately reflecting every movement in global crude oil prices and the exchange rate.
“We are introducing price modulation. Pump prices should not have to follow every swing in global crude or exchange rate. The government is negotiating a ceiling of ₦1,350 a litre on the ex-gantry cost of petrol to keep pump prices stable”, he stated.
Under the proposed arrangement, where the actual cost of petrol rises above the ceiling, refiners and importers would absorb the difference and recover it later when crude prices or exchange rates become more favourable.
Oyedele said the mechanism was neither a subsidy nor price control, but an attempt to smooth out price fluctuations and provide greater predictability for consumers and businesses.
“This is neither a subsidy nor a price control; it is designed to smooth prices over time, rather than suppressing them”, he noted.
He argued that price stability was important because sudden increases in petrol prices have a ripple effect across the economy, particularly on transportation, food distribution and logistics.
“The reason is simple: ₦1,400 a litre today and tomorrow is better than ₦1,500 today and ₦1,300 tomorrow, because volatility itself adds to uncertainty and fuels go up sharply; they rarely come down as fast”, Oyedele said.
The proposed ceiling, according to the minister, would be reviewed monthly, with adjustments made where necessary and the figures published for transparency.
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Oyedele Defends Subsidy Removal
Oyedele also defended the removal of petrol subsidy, arguing that the policy had shielded the country from an even more severe fiscal burden amid the recent rise in international crude oil prices.
He said crude oil, which traded at around $70 per barrel before the conflict, had risen, while the price of petrol in Nigeria moved from approximately ₦830 per litre to an average of ₦1,400.
“We do not like ₦1,400/litre. It’s expensive. But if the subsidy had not been removed by Mr President, what we’d be dealing with today would be far worse than ₦1,400”, he said.
The minister, however, acknowledged that the increase in fuel prices had significantly raised transportation and logistics costs, with vulnerable households bearing much of the pressure.
He said the 30-day NNPC discount was therefore intended to provide targeted relief without reversing the government’s decision to end the previous subsidy arrangement.
Other Relief Measures
Oyedele said the Federal Government was also working on forward crude sales to domestic refiners as part of efforts to insulate the local market from international price volatility.
He said increased domestic crude production would also help provide greater stability in the supply of crude to local refineries.
The government, he added, was working with state governments under the new tax laws to reduce taxes and levies that contribute to higher fuel and logistics costs.
“We’re working with the states across the federation under the new tax laws. We are reigning in the taxes and levies that inflate fuel and logistics costs”, he said.
The minister further disclosed that the government was increasing funding for cash transfers to vulnerable households while subsidising credit for small businesses and consumers.
It is also working with state governments to accelerate the rollout of compressed natural gas (CNG) as an alternative fuel for transportation.
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