Presidency Forecloses Return Of Petrol Subsidy, Backs NNPCL’s Target of N1,350 Petrol Cost Ceiling

Deji Elumoye in Abuja

The Presidency on Thursday declared that the Bola Tinubu-led administration has no intention of going back to the fuel subsidy reform jettisoned over three years ago. Rather, it announced the introduction of
additional measures to ensure that the benefits reach more Nigerians faster and in more tangible ways.

Presidential spokesperson, Bayo Onanuga, made this clarification on Thursday in a statement entitled, “NNPC Retail Forgoes Petrol Profit Margin to Offer Some Support to Nigerian Households Amid Global Petrol Crisis; FG Announces Additional Measures.”
He said as part of the measures, the Nigerian National Petroleum Company Limited (NNPCL), has agreed to forgo its petrol retail profit margin and sell the product to Nigerians at cost to cushion vulnerable households from the impact of global crude oil price shocks and volatility.

The presidential aide explained that NNPC Retail, which already sells petrol at the lowest price in the market, will commence the new arrangement within the next 30 days.
Under the initiative, Onanuga said if NNPC’s landing cost is N1,300 per litre, the company will sell petrol at the same price, particularly to commercial transport operators.

He further stated that the Federal Government is introducing forward sales of crude oil to domestic refineries, explaining that as production rises and previously committed crude is freed up, the measure is expected to shield pump prices from volatility in the global market. According to him, government is also negotiating a ceiling of N1,350 per litre on the ex-gantry or landing cost of petrol to stabilise pump prices.

Under the proposed arrangement, where costs rise above the ceiling, Onanuga stated that refiners and importers will bear the shortfall and recover it later when crude oil prices or the exchange rate become more favourable, without breaching the ceiling.
“This is neither a subsidy nor a price control: it is designed to smooth prices over time rather than suppressing them. The reasoning is simple. 1,400 naira a litre today and 1,400 tomorrow is better than 1,500 today and 1,300 tomorrow, because volatility itself adds to uncertainty and cost. And when fares rise sharply, they rarely fall as fast. The ceiling will be reviewed monthly, reset as costs require, and the figures published for transparency.”

He explained that the interventions also extend to transportation and logistics costs, with the Federal Government, working with states and security agencies under the 2025 tax reform laws, reining in the collection of road taxes and levies that inflate fares and logistics costs.

Onanuga noted that the interventions are intended to cushion the impact of rising global crude oil prices and volatility on households without undermining the petrol market reforms introduced by the administration.
“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 increasing funding for cash transfers to the most vulnerable households and expanding subsidised credit for small businesses and consumers. Onanuga further highlighted an accelerated rollout of Compressed Natural Gas, CNG, with the Federal Government scaling up deployment in collaboration with state governments.

He said the government expects transport operators to pass the savings on to passengers through lower fares, noting that CNG is between 60 and 70 per cent cheaper than petrol. Another measure under consideration is an excess profit tax on operators who take undue advantage of consumers anywhere along the energy value chain.

Onanuga stated that proceeds from such taxes imposed on price gouging would be used exclusively to cushion the impact of fuel prices through transport support or vouchers for urban minimum-wage earners, who are considered among the most vulnerable.
He added that the Federal Government will work with the National Assembly to consider enhanced tax relief for low-income earners under the 2027 Finance Bill. The government is also cutting regulatory costs and red tape that feed into the cost of doing business and, indirectly, contribute to higher prices of goods and services.

Onanuga disclosed that the Federal Government is equally investing in a National Strategic Fuel Reserve to protect households and businesses from future energy shocks. Under the arrangement, refined petroleum products would be released into the market under clear and published rules whenever a global disruption or hoarding threatens supply and price stability.

He explained that the strategic reserve is not a subsidy and does not fix prices, but is designed to secure supply and reduce price volatility, prevent artificial scarcity, deter market manipulation and anchor long-term energy security so that a deregulated market delivers stable growth rather than sudden price shocks.

The presidential media aide also identified better traffic and logistics management as part of the interventions, with traffic management agencies expected to improve traffic flow, particularly in major urban centres, to reduce fuel consumption.
Onanuga added that NIPOST’s newly launched address codes are expected to make logistics more efficient and cheaper.

He stressed that none of the measures amounts to the restoration of a blanket petrol subsidy, saying such a move would create longer-term economic harm in exchange for a short-term solution.
According to him, each of the interventions is designed to reach Nigerians who need support most without putting the wider economy at risk.

The Presidency also acknowledged the difficulties Nigerians are facing over the high cost of fuel, while explaining why the government considers a return to the previous subsidy regime unsustainable.
“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. 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.”
Beyond the immediate measures to cushion fuel and transportation costs, Onanuga said the administration is pursuing broader fiscal interventions aimed at easing inflationary pressures.
“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.”

He highlighted that the discount initiative, supported by President Bola Tinubu, was among a raft of measures announced earlier on Thursday by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele.