Petrol discount not subsidy — Presidency

On Thursday, the Nigerian government announced that the Nigerian National Petroleum Company Limited will no longer profit from petrol sales and will sell it at cost. This move, backed by President Bola Tinubu, aims to protect households from global crude oil price fluctuations. The petrol price reduction is part of a series of measures announced by the Minister of Finance, Taiwo Oyedele.

The Nigerian National Petroleum Company Limited, which already sells petrol at the lowest market price, will implement the new pricing strategy within 30 days. The government hopes other marketers will follow suit, as the recent surge in crude and petrol prices is expected to be temporary. President Tinubu's administration is also negotiating a ceiling of N1,350 per litre on the ex-gantry or landing cost of petrol to maintain stable pump prices.

If costs exceed the ceiling, refiners and importers will bear the burden and recover it later when prices or exchange rates allow. This pricing strategy is not a subsidy or price control but a way to stabilize prices over time, rather than suppressing them. The government will also sell crude forward to domestic refineries to further shield pump prices from global volatility.

Other steps taken by the government include reducing road taxes and levies, increasing funding for cash transfers and subsidized credit, scaling up compressed natural gas deployment, and investing in regulatory cost reduction and a refined products reserve.