NNPC Retail to Sell Petrol at Cost for 30 Days as FG Unveils Measures to Cushion Fuel Shock

By Zainab Uzomah|Abuja

The Nigerian National Petroleum Company (NNPC) Retail has agreed to forgo its petrol retail profit margin and sell fuel at cost for the next 30 days as part of Federal Government measures to cushion households from the impact of rising global crude oil prices.

In a statement issued by the Special Adviser to the President on Information and Strategy, Bayo Onanuga, on Thursday, the Finance Minister and Coordinating Minister of the Economy, Taiwo Oyedele, said the measure was backed by President Bola Ahmed Tinubu and was intended to provide temporary relief, particularly to vulnerable households and commercial transport operators.

Under the arrangement, NNPC Retail will sell petrol at its landing cost. For instance, if the company’s landing cost is N1,300 per litre, it will sell at the same price without adding a retail profit margin. Oyedele urged other fuel marketers to consider similar measures, stressing that the current surge in crude oil and petrol prices was expected to be temporary.

He, however, clarified that the decision did not amount to a return of the petrol subsidy, which was removed in May 2023. The minister also announced plans to negotiate a ceiling of N1,350 per litre on the ex-gantry or landing cost of petrol to moderate pump-price volatility.Under the proposed arrangement, refiners and importers would absorb any cost above the ceiling and recover the difference when crude oil prices or foreign exchange conditions improve.

Oyedele said the ceiling would be reviewed monthly and published to promote transparency, adding that the policy was designed to smooth out price fluctuations rather than control prices.

The Federal Government also plans forward sales of crude oil to domestic refineries to shield local fuel prices from global market volatility as domestic crude production increases.

Other measures include increased funding for cash transfers to vulnerable households, subsidised credit for small businesses and consumers, and an accelerated rollout of compressed natural gas (CNG).

The government said CNG was expected to be 60 to 70 per cent cheaper than petrol and urged transport operators to pass the savings to passengers through reduced fares. The government is also considering an excess profit tax on operators found to be taking undue advantage of consumers along the energy value chain.

It said proceeds from any such tax would be used exclusively to cushion the impact of fuel prices through transport support or vouchers for urban minimum-wage earners.The Presidency further announced plans for a National Strategic Fuel Reserve, which would allow refined petroleum products to be released into the market during major global disruptions or artificial scarcity.

According to the government, the reserve would help secure fuel supplies, discourage hoarding and market manipulation, and reduce future price volatility without reintroducing subsidies.

The Federal Government also said it was working to reduce regulatory costs, improve traffic management in major cities and strengthen logistics efficiency to reduce fuel consumption and transportation costs.

The Presidency acknowledged the hardship caused by high fuel prices but maintained that reversing the fuel subsidy removal would undermine the broader economic reforms.

It said the government was instead focused on targeted interventions to ensure that the benefits of the reforms reached more Nigerians, while also working on fiscal measures aimed at bringing inflation down to single digits sustainably.