The Nigerian National Petroleum Company (NNPC) Limited has agreed to forgo its retail profit margin and sell petrol at cost for 30 days as part of measures approved by President Bola Ahmed Tinubu to cushion the impact of rising global crude oil prices on Nigerian households.
The decision was announced on Thursday by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, who unveiled additional Federal Government interventions aimed at moderating fuel price volatility, reducing transportation costs and protecting vulnerable Nigerians from the effects of the global energy crisis.
Under the arrangement, NNPC Retail will sell petrol at its actual landing cost without adding its retail profit margin. For instance, if the company’s landing cost is ₦1,300 per litre, it will sell at the same price, with commercial transport operators among the intended beneficiaries.
The government said the intervention, which has the backing of President Tinubu, is intended to provide temporary relief while global crude oil and petroleum product prices remain volatile. Oyedele expressed hope that other petroleum marketers would consider similar measures, noting that the current price surge was not expected to persist indefinitely.
He, however, clarified that the arrangement does not amount to a return to the petrol subsidy regime, which ended on May 29, 2023. According to him, the administration remains committed to market-based reforms while introducing targeted interventions to reduce the burden on households and businesses.
As part of the measures, the Federal Government is negotiating a ceiling of ₦1,350 per litre on petrol’s ex-gantry or landing cost. Under the proposed framework, where costs exceed the ceiling, refiners and importers would absorb the difference temporarily and recover it later when crude oil prices or exchange rates become more favourable. The ceiling would be reviewed monthly, with the relevant figures published for transparency.
Oyedele explained that the arrangement was designed to moderate sudden price fluctuations rather than impose permanent price controls. He said maintaining more predictable prices would help households and businesses plan better, particularly because transport fares and logistics costs often rise sharply when fuel prices increase but do not decline at the same pace when prices fall.
The government also plans to introduce forward sales of crude oil to domestic refineries. Increased production and the release of previously committed crude supplies are expected to improve domestic availability and reduce the exposure of local petroleum prices to international market shocks.
In another intervention, the Federal Government is accelerating the rollout of compressed natural gas (CNG) in collaboration with state governments. With CNG estimated to be 60 to 70 per cent cheaper than petrol, the government expects transport operators to pass the savings on to passengers through lower fares.
The administration is also working with state governments and security agencies to curb the collection of unauthorised road taxes and levies that increase transport fares and logistics costs. The initiative will be implemented alongside provisions of the 2025 tax reform laws, while funding for cash transfers to vulnerable households and subsidised credit for small businesses and consumers will be increased.
Other proposed measures include consideration of an excess-profit tax on operators found to be exploiting consumers across the energy value chain. The government said proceeds from taxes targeting price gouging would be dedicated to cushioning fuel price increases, including transport support or vouchers for urban minimum-wage earners. It will also work with the National Assembly to consider enhanced tax relief for low-income earners under the 2027 Finance Bill.
To strengthen long-term energy security, the Federal Government is investing in a National Strategic Fuel Reserve. Under the proposed framework, refined petroleum products would be released into the market according to clear, published rules whenever global disruptions or hoarding threaten supply and price stability. The initiative is intended to prevent artificial scarcity, discourage market manipulation and reduce the effects of future energy shocks without reinstating fuel subsidies or fixing prices.
The government is equally pursuing measures to reduce regulatory costs that contribute to the prices of goods and services, improve traffic management in major cities to reduce fuel consumption, and use the Nigerian Postal Service’s newly launched address codes to make logistics and deliveries more efficient and affordable.
Acknowledging the hardship Nigerians are experiencing because of high fuel prices, the Presidency maintained that reversing the removal of the subsidy would risk reviving the economic problems associated with the former system, including fuel scarcity, smuggling, currency pressures and fiscal instability.
The government said its objective was to preserve the gains of economic reforms while ensuring that their benefits reach more Nigerians through targeted and practical interventions. It also disclosed that a comprehensive package of fiscal measures was being developed to bring inflation down to single digits sustainably in the near term.
The latest interventions form part of the Tinubu administration’s efforts to manage the immediate effects of global energy market disruptions while maintaining its broader economic reform programme. Their impact will depend on implementation, transparency and the extent to which the intended savings reach transport users, low-income households and small businesses.