FG Says NNPC Petrol Discount Won’t Affect Public Funds

The Federal Government has insisted that the petrol discount being offered by the Nigerian National Petroleum Company Limited (NNPC) is not a return to fuel subsidy and will not draw funds from the Federal Government or the Federation Account.

Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, said the discount is being funded entirely through a reduction in NNPC Retail’s profit margin.

According to Oyedele, NNPC Retail purchases petrol from the Dangote Refinery and other suppliers at prevailing market prices before adding its retail margin to determine the pump price. Under the current arrangement, the company is temporarily reducing or waiving part of that margin to sell petrol at a lower price.

He explained that this differs from the subsidy regime abolished in 2023, under which government revenue was used to cover part of the cost of petrol for consumers.

“The discount is not funded by the federal budget or the Federation Account,” Oyedele said.

The clarification follows the Federal Government’s announcement of a 30-day petrol discount at NNPC stations, with public transport operators expected to receive priority. The initiative is part of measures introduced to cushion households and businesses from the impact of rising global oil and petrol prices.

NNPC Could Offset Lower Margins Through Higher Sales

Oyedele argued that the reduction in NNPC Retail’s margin does not necessarily mean lower overall profits or reduced dividends to the Federation.

He said lower prices could attract higher sales volumes and strengthen customer loyalty, potentially offsetting the reduction in profit per litre.

The minister also maintained that the discount should not create significant incentives for petrol smuggling, noting that NNPC Retail’s margin represents less than five per cent of the pump price. Petrol prices in neighbouring countries, he said, remain substantially higher than those in Nigeria.

FG Rules Out Return of Blanket Subsidy

The government has repeatedly maintained that the intervention is designed as a temporary commercial measure rather than a reversal of the 2023 subsidy removal.

Other measures announced by the Federal Government include a proposed ₦1,350-per-litre ceiling on petrol’s ex-gantry or landing cost, expanded compressed natural gas deployment, additional support for vulnerable households and subsidised credit for small businesses and consumers.

The government says the broader objective is to provide short-term relief to consumers while protecting public finances and maintaining the market-based pricing framework introduced after the removal of petrol subsidy.