The Presidency says NNPC will forgo its petrol retail profit margin for 30 days, selling fuel at cost as FG pursues a N1,350-per-litre cost ceiling.

The Presidency says the Nigerian National Petroleum Company (NNPC) Limited has agreed to suspend its petrol retail profit margin and sell the product at cost for the next 30 days.

In a statement on Thursday, Bayo Onanuga, the presidential spokesperson, said the measure is aimed at cushioning the effect of global crude oil price shocks and volatility on vulnerable households.

“The Nigerian National Petroleum Company (NNPC) agreed today to forgo its petrol retail profit margin and sell to Nigerians at cost to cushion the impact of global crude oil price shocks and volatility on vulnerable households,” he said.

“NNPC Retail, which already sells petrol at the lowest price in the market, will offer this new deal within the next 30 days. This means if NNPC’s landing cost is N1,300, it will sell fuel to Nigerians, especially commercial vehicles, at the same price.”

Part of a Wider Relief Package

Onanuga said the measure is part of a package announced by Finance Minister Taiwo Oyedele to ease the impact of high petrol prices, and that it is backed by President Bola Tinubu.

Speaking at a briefing, Oyedele said the discount would apply to petrol dispensed by NNPC Limited for the next 30 days in the first instance, with priority for public transporters nationwide. He hoped other marketers would follow NNPC’s lead, as the sharp rise in crude and petrol prices is not expected to last long.

Oyedele was emphatic that the arrangement must not be misinterpreted as a restoration of the petrol subsidy, which ended on May 29, 2023. “It’s not a subsidy, government is just saying we sell to you at cost,” he said.

N1,350 Ceiling and Forward Crude Sales

Oyedele also announced forward sales of crude to domestic refineries. As production rises and previously committed crude is freed up, this is expected to help shield pump prices from global market volatility.

He said the federal government is negotiating a ceiling of N1,350 a litre on the ex-gantry or landing cost of petrol, subject to monthly review, to keep pump prices stable. Where costs rise above the ceiling, refiners and importers will carry the shortfall and recover it later, when crude prices or the exchange rate allow, without breaching the ceiling.

The minister described the mechanism as neither a subsidy nor price control, but a way of smoothing prices over time. “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,” he said.

What the N1,350 Figure Does and Does Not Mean

The figures in the announcement have been reported in different ways. The proposed N1,350 figure is a ceiling on the ex-gantry or landing cost of petrol, not a guaranteed nationwide pump price. Some outlets have reported that designated NNPC stations would sell petrol at N1,350 a litre, while the Presidency’s own statement says NNPC Retail will sell at its landing cost, using N1,300 only as an illustration. The actual price consumers pay under the 30-day arrangement will depend on NNPC’s calculation of its landing cost and operating costs.

Presidency Rules Out Return to Subsidy

The Presidency acknowledged the pressure caused by rising fuel costs, while ruling out a return to the previous subsidy regime.

“Removing the fuel subsidy came at a price. But the alternative has been tried. Nigeria has already lived through that cycle: scarcity, smuggling, a collapsing currency and a fiscal crisis,” Onanuga said.

“We cannot afford to live through it again, least of all in response to a temporary disruption, and at the very moment the results of reform are gathering pace.

“Government is not out to reverse a necessary reform designed to set our country on the path towards sustained prosperity. It is to ensure its gains reach more Nigerians, faster and in more tangible ways. That is our work, and we are committed to doing it.”

He said the federal government is also working on a comprehensive package of fiscal measures to bring inflation down to single digits sustainably in the near term.

The announcement has drawn criticism from opposition figures, who have questioned what happens once the 30-day window ends and whether the measure offers lasting relief.