The Federal Government has announced a fresh package of measures to cushion the impact of high petrol prices on Nigerians, including a 30-day margin discount at NNPC Limited stations, a proposed ₦1,350 per litre ceiling on petrol ex-gantry or landing costs and increased cash transfers to vulnerable households.
Minister of Finance and Coordinating Minister of the Economy, Prof. Taiwo Oyedele, disclosed this on Thursday at a press briefing in Abuja on fuel prices and the subsidy question, saying the measures were aimed at easing the burden on households and businesses without returning to blanket fuel subsidy.
Oyedele, who briefed journalists alongside the Group Chief Executive Officer of NNPC, Heineken Lokpobiri, the Comptroller-General of the Nigeria Customs Service and the Executive Chairman of the Presidential Initiative on Compressed Natural Gas (Pi-CNG), among others, said the government recognised the hardship caused by rising fuel prices.
He said the government would offer a discount on petrol dispensed by NNPC Limited for the next 30 days, with public transport operators to receive priority nationwide.
The minister also disclosed that government was negotiating a ceiling of ₦1,350 per litre on the ex-gantry or landing cost of petrol to reduce the impact of volatility in global crude prices and the exchange rate on pump prices.
Under the proposed arrangement, he explained, refiners and importers would carry any shortfall when costs rise above the ceiling and recover it later when crude prices or the exchange rate become favourable.
Oyedele stressed that the arrangement was neither a subsidy nor price control, but a mechanism to smoothen pump-price fluctuations and provide greater certainty for consumers and businesses.
He said the ceiling would be reviewed monthly, with the figures published for transparency.
The Federal Government, according to him, is also working to increase funding for cash transfers to the most vulnerable households and provide subsidised credit to small businesses and consumers.
It is also removing illegal road taxes and levies that add to transportation and logistics costs, while accelerating the deployment of Compressed Natural Gas (CNG) vehicles in collaboration with state governments.
Oyedele said government would consider an excess profit tax on operators found to be taking undue advantage of consumers along the energy value chain.
According to him, proceeds from such a tax would be used exclusively to cushion the impact of fuel prices through transport support or vouchers for vulnerable urban minimum-wage earners.
He added that government would work with the National Assembly to consider enhanced tax relief for low-income earners under the 2027 Finance Bill.
Another measure, he said, is the planned establishment of a National Strategic Fuel Reserve, which would allow refined products to be released into the market during global disruptions or instances of hoarding that threaten supply and price stability.
The minister explained that the strategic reserve would not be used to fix prices or subsidise petrol, but to prevent artificial scarcity, discourage market manipulation and reduce the volatility associated with global energy shocks.
Oyedele said government was also pursuing forward sales of crude to domestic refineries as crude production rises and previously committed volumes are freed up.
He said the arrangement would help shield domestic petrol prices from volatility in the international market.
The minister further disclosed plans to reduce regulatory costs that contribute to the cost of doing business and, consequently, the prices of goods and services.
He said traffic management agencies would improve traffic flow in major urban centres to reduce fuel consumption, while NIPOST’s newly launched address codes would help make logistics more efficient and cheaper.
Oyedele said the measures became necessary as the current surge in fuel prices was being driven largely by a global energy shock following the conflict in the Gulf, with Brent crude trading above $100 per barrel.
He said petrol, which sold for about ₦830 per litre when crude was around $70 per barrel before the conflict, now averages about ₦1,400 per litre.
While acknowledging that higher fuel prices were imposing significant pressure on households and businesses, the minister maintained that returning to a blanket subsidy would create greater fiscal and economic risks.
He estimated that returning petrol to its pre-reform price would cost more than ₦20 trillion annually, while a ₦500 per litre pump price would cost over ₦16 trillion a year.
Oyedele said such expenditure would have implications for government spending on salaries, pensions, schools, hospitals and security.
He said subsidy removal had released ₦15.8 trillion to the Federation Account between June 2023 and December 2025, with ₦10.4 trillion going to state and local governments.
According to him, government had also used savings from subsidy removal, alongside additional independent revenue and borrowing, on higher wages, infrastructure, electricity subsidy and social transfers, while part of the funds went into stabilising the economy.
The minister said government had already provided significant relief through tax and duty waivers on petroleum products, which he put at over ₦3.3 trillion for petrol alone for the year to September 30, 2026.
He said the waivers currently saved consumers between ₦400 and ₦600 per litre when measured against African and global averages.
Oyedele also pointed to the expansion of CNG as another avenue for reducing dependence on petrol, saying more than 120,000 vehicles were now running on CNG, supported by over 400 conversion centres, 96 refuelling stations and 18 L-CNG stations.
He said more than 550 CNG buses had so far been deployed, with fares falling by between 30 and 50 per cent where the buses operate.
The minister said the government would continue to target relief at vulnerable Nigerians rather than restore a blanket subsidy, insisting that the objective was to ensure that the benefits of economic reforms reached more citizens.
“We remain open to ideas. But any credible proposal should answer three questions: What will it cost? How will it be funded sustainably? And what pump price will it deliver?” he said.
Oyedele added that the Federal Government was also working on a comprehensive package of fiscal measures aimed at bringing inflation down to single digits in the near term.
SOURCE: Independent
