The Federal Government of Nigeria has introduced a series of measures aimed at mitigating the effects of rising petrol prices on households, businesses, and transport users. According to the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, these measures were outlined during a press briefing on fuel prices and the subsidy question in Abuja. The government emphasized that these measures are designed to ease the immediate burden of higher petrol prices without reverting to a blanket fuel subsidy.
One of the key measures announced is a 30-day petrol discount at NNPC stations. The government will offer a margin discount on petrol dispensed by the Nigerian National Petroleum Company Limited for the next 30 days, with priority given to public transporters nationwide. Oyedele clarified that this measure is not a return to subsidy, as the government will effectively allow petrol to be sold at cost under the arrangement. This move aims to provide immediate relief to transporters and consumers.
The government also plans to increase forward sales of crude oil to domestic refineries as production rises. This strategy is expected to free up committed crude supplies and help shield domestic petrol prices from fluctuations in the international market. Additionally, the government is negotiating a ceiling of N1,350 per litre on the ex-gantry or landing cost of petrol. Under this proposed arrangement, refiners and importers would absorb any shortfall when costs rise above the ceiling and recover the difference when crude prices or the exchange rate become more favourable.
To reduce the cost of transporting goods and services, the Federal Government plans to work with states to eliminate illegal road taxes and levies. This move will be pursued under the 2025 tax reform laws. Furthermore, the government said it would increase cash transfers to vulnerable households as part of efforts to cushion the effect of higher fuel prices. It will also provide subsidized credit to small businesses and consumers, ensuring that the most affected groups receive targeted support.
The government is also set to accelerate the deployment of compressed natural gas vehicles across the country. Federal and state governments will support the rollout, while transport operators will be encouraged to pass the savings from CNG use on to passengers. This initiative aims to reduce the reliance on petrol and diesel, thereby decreasing the impact of price fluctuations. Moreover, the government will consider an excess profit tax for operators found to be taking undue advantage of the situation anywhere along the energy value chain.
In a bid to reduce unnecessary regulatory requirements and costs that add to the expenses of businesses and ultimately push up the prices of goods and services, the government said it would reduce regulatory costs. Additionally, the government plans to establish a National Strategic Fuel Reserve to improve supply security and reduce the impact of global disruptions. Refined products will be released into the market under clear, published rules whenever a global disruption or hoarding threatens supply and price stability.
The government also aims to improve traffic management in urban areas to reduce fuel consumption and cut logistics costs. It plans to use NIPOST address codes to make logistics operations more efficient and cheaper. According to Oyedele, the measures are designed to reach those who need help without putting the wider economy at risk. The government emphasized that it does not intend to return to a blanket fuel subsidy, instead opting for targeted measures to support those most affected.
Key points
- The Federal Government has announced 10 measures to cushion the impact of rising petrol prices.
- The measures include a 30-day petrol discount at NNPC stations and a ceiling of N1,350 per litre on the ex-gantry or landing cost of petrol.
- The government aims to ease the immediate burden of higher petrol prices without reverting to a blanket fuel subsidy.
