The Federal Government has announced a 30-day discount on petrol sold by the Nigerian National Petroleum Company Limited as part of efforts to cushion the impact of rising fuel and transportation costs on Nigerians.
The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, disclosed this on Thursday during a press briefing in Abuja on the government’s response to rising petrol prices.
Oyedele stressed that the measure should not be regarded as a return to the controversial fuel subsidy regime, saying the government would only make petrol available to consumers at cost during the initial 30-day period.
He said public transport operators nationwide would receive priority under the arrangement.
“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,” the minister said.
Beyond the temporary discount, Oyedele disclosed that the government was negotiating a N1,350-per-litre ceiling on the ex-gantry or landing cost of petrol.
He explained that the proposed ceiling was aimed at reducing the effect of fluctuations in international crude oil prices and foreign exchange rates on petrol prices.
The minister clarified that the proposed N1,350 ceiling would not translate into a fixed pump price of N1,350 per litre at filling stations.
Rather, he said, the mechanism would help prevent sudden increases in the underlying cost of petrol from being immediately transferred to consumers.
“Pump prices should not have to follow every swing in global crude or the exchange rate. The government is negotiation a ceiling of N1,350 a litre on the ex gantry or landing cost of petrol to keep pump prices stable,” Oyedele said.
Under the proposed arrangement, refiners and importers would initially bear any shortfall whenever the actual cost rises above the agreed ceiling, with the difference expected to be recovered when market conditions improve.
Oyedele said the arrangement was neither a subsidy nor conventional price control, but a mechanism intended to moderate price fluctuations over time.
He said reducing volatility was important because frequent increases in petrol prices created additional uncertainty and costs for households and businesses.
“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 minister said the N1,350 ceiling would be reviewed monthly, with the government publishing the figures to ensure transparency.
He explained that the latest measures became necessary because existing interventions had not sufficiently eased the pressure created by higher fuel and transportation costs.
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The government said the initiatives were aimed at providing immediate relief while creating greater predictability in the downstream petroleum market.
The measures are expected to particularly benefit public transport operators, whose operating costs have risen sharply alongside petrol prices, with the resulting increases affecting fares paid by commuters.
