The Federal Government has disclosed that Nigerians will get a discount whenever they buy petrol at the Nigerian National Petroleum Company Limited (NNPCL).
The discount, which is part of the efforts by the government to address the devastating impacts of high fuel prices on Nigerians and stabilise pump prices, will be in place for 30 days.
The intervention was announced by Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, on Thursday at a press briefing on fuel prices and subsidy questions in Abuja.
Oyedele said the discount is not a subsidy, but an arrangement by the government to sell the petrol at cost to public transporters and it is designed to smooth out petrol prices over time.
“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.”
The Minister disclosed that the Federal Government is aiming at a ₦1,350-per-litre ceiling on the ex-gantry or landing cost of petrol.
Oyedele said the latest intervention became imperative because existing measures had not fully addressed the pressure on households and businesses following increases in fuel and transportation costs.
Under the proposed price modulation mechanism, the government is negotiating a ₦1,350-per-litre ceiling on the ex-gantry or landing cost of petrol, subject to monthly reviews.
The proposed ceiling does not mean petrol will sell for ₦1,350 per litre at filling stations. Rather, it is intended to prevent sharp movements in global crude prices or the exchange rate from immediately translating into corresponding increases in the cost of petrol.
“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,” Oyedele said.
He added that where the cost rises above the ceiling, refiners and importers would initially bear the shortfall and recover it later when market conditions allow.
“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 would be reviewed monthly, with the figures published for transparency.
