โฆSays no ๐๐ฎ๐๐ฅ๐ข๐ ๐๐จ๐ง๐๐ฒ ๐๐ง๐ฏ๐จ๐ฅ๐ฏ๐๐
Emma Ujah, Abuja Bureau Chief
The Minister of Finance and Coordinating Minister of the Economy, Mr. Taiwo Oyedele, has said that the retail discount sale of fuel by the Nigerian National Petroleum Company Limited (NNPCL) is not a subsidy.
He provided the clarification in a statement in Abuja, today.
According to him, โ๐๐ฉ๐ฆ ๐ฅ๐ช๐ด๐ค๐ฐ๐ถ๐ฏ๐ต ๐ญ๐ฐ๐ธ๐ฆ๐ณ๐ด ๐ฑ๐ณ๐ช๐ค๐ฆ๐ด ๐ง๐ฐ๐ณ ๐ค๐ฐ๐ฏ๐ด๐ถ๐ฎ๐ฆ๐ณ๐ด ๐ข๐ฏ๐ฅ ๐ค๐ข๐ฏ ๐ด๐ต๐ณ๐ฆ๐ฏ๐จ๐ต๐ฉ๐ฆ๐ฏ ๐๐๐๐ ๐๐ฆ๐ต๐ข๐ช๐ญโ๐ด ๐ฃ๐ถ๐ด๐ช๐ฏ๐ฆ๐ด๐ด ๐ข๐ฏ๐ฅ ๐ฑ๐ณ๐ฐ๐ง๐ช๐ต๐ด ๐ข๐ต ๐ต๐ฉ๐ฆ ๐ด๐ข๐ฎ๐ฆ ๐ต๐ช๐ฎ๐ฆ.
โSince 1 October 2026, motorists have been paying less for petrol at NNPC Retail Limited stations, following a discount on the companyโs retail margin. We welcome the relief this brings to households, commuters and transporters.
โSome commentators have described the discount as a return of fuel subsidy. That is not correct. Here, plainly, is what the discount is and what it is not.โ
๐๐๐ซ๐ ๐ข๐ง d๐ข๐ฌ๐๐จ๐ฎ๐ง๐ญ ๐๐ง๐ ๐ s๐ฎ๐๐ฌ๐ข๐๐ฒ a๐ซ๐ n๐จ๐ญ ๐ญ๐ก๐ s๐๐ฆ๐
โEvery marketer adds a margin to the price it pays for the fuel it sells. A margin discount means the retailer chooses to take a smaller margin, or no margin at all for a period, and passes the saving to the customer. The cost of the discount is borne by the retailer alone.
โA subsidy is different. It is when government pays part of the price the consumer would otherwise pay. That money comes from public revenue โ funds that would otherwise go to salaries, schools, hospitals and infrastructure. That is the regime this administration ended in 2023, and it is not coming back.
๐๐จ p๐ฎ๐๐ฅ๐ข๐ m๐จ๐ง๐๐ฒ p๐๐ฒ๐ฌ ๐๐จ๐ซ ๐ญ๐ก๐ d๐ข๐ฌ๐๐จ๐ฎ๐ง๐ญ
โThe discount is not funded by the federal budget or the Federation Account. NNPC Retail buys petrol from the Dangote Refinery and other suppliers at market prices, on commercial terms, then adds its retail margin to set the pump price. The discount comes out of that margin alone, so the discounted pump price remains market-reflective.
โThis is quite different from crude oil owned by the Federation. Selling the nationโs crude below market price would amount to a subsidy, because the shortfall would be borne by public revenue.โ
๐๐ข๐ฌ๐๐จ๐ฎ๐ง๐ญ n๐จ๐ญ e๐ฑ๐ฉ๐๐๐ญ๐๐ ๐ญ๐จ r๐๐๐ฎ๐๐ ๐ ๐๐๐๐ซ๐๐ญ๐ข๐จ๐ง ๐๐ข๐ฏ๐ข๐๐๐ง๐๐ฌ
The Minister added that the NNPCL discount would nor affect Federation dividends the company would not lose any revenue.
Mr. Oyedele said further, โSome have asked whether a lower margin means lower profits for NNPCL, and so lower dividends to the Federation. It need not. A smaller margin or temporary zero margin on each litre can be more than offset by selling more litres over time.
โAnd a discount builds customer loyalty that lasts well beyond the discount period itself. Together, these can raise NNPC Retailโs profits, and the dividends paid to the Federation: a win-win for consumers and for government. Margin discounts are a routine commercial strategy, used by retailers the world over.
๐๐ข๐ฌ๐๐จ๐ฎ๐ง๐ญ wonโ๐ญ d๐ข๐ฌ๐ญ๐จ๐ซ๐ญ m๐๐ซ๐ค๐๐ญ ๐จ๐ซ e๐ง๐๐จ๐ฎ๐ซ๐๐ ๐ s๐ฆ๐ฎ๐ ๐ ๐ฅ๐ข๐ง๐
โThe retail margin on petrol is less than 5 percent of the pump price. A discount within that margin cannot meaningfully widen the gap between prices in Nigeria and in neighbouring countries, where petrol already costs 20 to 40 percent more. It therefore creates no new incentive for smuggling, and no distortion of the kind that subsidy regimes produced in the past.โ
The bottom line, according to the minister is that, โ ๐จ ๐๐๐๐๐๐ ๐ ๐๐๐๐๐ ๐ ๐๐๐๐๐๐ ๐๐๐๐๐ ๐๐ ๐๐๐๐๐ ๐๐๐ ๐๐๐๐๐ ๐๐ ๐๐๐๐. ๐ป๐๐ ๐ต๐ต๐ท๐ช ๐น๐๐๐๐๐ ๐ ๐๐๐๐๐๐๐ ๐๐๐๐๐๐ ๐๐๐ ๐๐๐๐๐ ๐๐๐๐๐๐๐ ๐๐๐๐๐ ๐๐๐ ๐๐๐ ๐๐๐๐๐๐ ๐๐๐๐๐, ๐๐๐ ๐๐ ๐๐๐ ๐๐๐๐๐๐๐๐๐๐ ๐ต๐ต๐ท๐ช ๐น๐๐๐๐๐โ๐ ๐๐๐๐๐๐๐๐ ๐๐ ๐๐๐ ๐๐๐๐ ๐๐๐๐.โ
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