By Ayobami Okerinde
The Federal Government is planning to negotiate a ceiling of N1,350 per litre on the ex-gantry cost of petrol in a move aimed at shielding pump prices from fluctuations in global crude oil prices and exchange rates.
Taiwo Oyedele, Minister of Finance and Coordinating Minister of the Economy, disclosed this on Thursday in Abuja while addressing a press conference on fuel prices and subsidy-related questions.
However, Oyedele acknowledged that the measures being proposed by the Federal Government would not completely ease the pressure on households.
He then outlined the proposed measures, including the N1,350 ceiling on the ex-gantry or landing cost of petrol, which he said was designed to reduce volatility in pump prices.
“We are introducing price modulation. Pump prices should not have to follow every swing in global crude or exchange rate. The government is negotiating a ceiling of N1,350 a litre on the ex-gantry cost of petrol to keep pump prices stable,” he said.
According to him, where the actual cost rises above the ceiling, refiners and importers would bear the shortfall and recover it later when crude prices or exchange rates become 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,” Oyedele said.
He explained that the objective was to prevent sharp swings in pump prices, saying, “The reason is simple: N1,400 a litre today and tomorrow is better than N1,500 today and N1,300 tomorrow, because volatility itself adds to uncertainty and fuels go up sharply; they rarely come down as fast.”
Oyedele said the ceiling would be reviewed monthly, with adjustments made where necessary and the figures published for transparency.
He also announced a 30-day discount on petrol dispensed by NNPC Limited, with priority given to public transporters nationwide, while insisting that the measure was not a subsidy.
Recall that Vanguard had earlier reported that the NNPC limited announced a ₦66 fuel discount for customers using the NNPC Fuel App at its stations nationwide.
“We are offering a discount on petrol dispensed by NNPC Limited for the next 30 days in the first instance with priority for public transporters nationwide. It’s not a subsidy; the government is saying we sell to you at a cost,” he said.
The minister said the government was also working on forward crude sales to domestic refiners, adding that rising production would help shield pump prices from volatility in the international market.
“We’re working with the states across the federation under the new tax laws. We are reigning in the taxes and levies that inflate fuel and logistics costs,” he added.
Oyedele said the government was also increasing funding for cash transfers to vulnerable households and subsidising credit for small businesses and consumers, while working with state governments to accelerate the rollout of compressed natural gas.
The proposed measures come amid a renewed political debate over fuel subsidies, with African Democratic Congress (ADC) presidential candidate Atiku Abubakar and Nigeria Democratic Congress (NDC) presidential candidate Peter Obi promising to restore the subsidy if elected in 2027.
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