The Federal Government has announced a 30-day discount on petrol sold at Nigerian National Petroleum Company Limited (NNPCL) filling stations as part of measures to cushion high fuel prices and stabilise pump prices.
Minister of Finance and Coordinating Minister of the Economy, Mr Taiwo Oyedele, announced this on Thursday at a press briefing on fuel prices in Abuja.
According to him, the discount is not a subsidy but an arrangement to sell petrol at cost.
“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; the government is just saying we sell to you at cost,” Oyedele said.
He also said the government is targeting an N1,350-per-liter ceiling on the ex-gantry or landing cost of petrol, subject to monthly reviews.
Oyedele explained that the ceiling is not the pump price but a mechanism to prevent sharp movements in global crude prices or exchange rates from immediately translating to higher petrol cost.
“Pump prices should not have to follow every swing in global crude or the exchange rate. The government is negotiating a ceiling of N1,350 a litre on the ex-gantry or landing cost of petrol to keep pump prices stable,” he said.
He said where costs rise above the ceiling, refiners and importers would initially bear the shortfall and recover it later when market conditions improve.
Oyedele said the arrangement is neither subsidy nor price control, but a price modulation mechanism to smooth volatility.
“The reasoning is simple: N1,400 a litre today and N1,400 a litre tomorrow is better than N1,500 a litre today and N1,300 a litre tomorrow. Why? Because volatility itself adds to uncertainty and cost and when fuel goes up sharply, they rarely come down as fast.”
He said the ceiling will be reviewed monthly and published for transparency.
