The Presidency has explained the plan by the Federal Government to reduce the impact of rising petrol prices on Nigerians.
According to the government, the Nigerian National Petroleum Company (NNPC) will forgo its retail profit margin and sell petrol at cost for the next 30 days, particularly to support vulnerable households and commercial transport operators.
The clarification came in a statement on Thursday by Special Adviser to the President on Information & Strategy, Bayo Onanuga.
The new arrangement, the presidency said, was announced on Thursday by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, as part of additional measures being introduced by the Federal Government in response to the recent rise in global crude oil and petrol prices.
According to the Presidency, NNPC Retail will sell petrol without adding its retail profit margin during the 30-day period. This means that if the company’s landing cost is N1,300 per litre, it would sell the product at N1,300 rather than adding its usual retail margin.
The measure, which has the backing of President Bola Tinubu, is expected to give priority to public transport operators and provide some relief to households facing higher transportation and living costs.
Oyedele said the decision should not be interpreted as a return to the petrol subsidy regime that was removed by Tinubu on May 29, 2023.
“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. So, it’s not a subsidy, government is just saying we sell to you at cost,” the minister said.
The minister expressed hope that other oil marketers would follow the example of NNPC as the Federal Government responds to the current increase in global crude and petrol prices.
The Presidency said the rise in international crude prices and the resulting pressure on petrol prices were not expected to continue indefinitely, making the temporary measure necessary to cushion Nigerians without reversing the broader fuel market reforms.
Oyedele also announced plans for the Federal Government to facilitate forward sales of crude oil to domestic refineries.
According to him, as domestic crude production increases and previously committed crude is made available, the arrangement would help protect local petrol prices from sudden changes in international market conditions.
Another major measure announced by the government is a proposed ceiling of N1,350 per litre on the ex-gantry or landing cost of petrol.
Oyedele said the Federal Government was negotiating the arrangement with the aim of preventing sudden increases in petrol prices when international crude prices or exchange rate movements push up the cost of the product.
Under the proposed arrangement, where the actual cost rises above the N1,350 ceiling, refiners and importers would initially carry the difference and recover it later when crude prices or exchange rates become more favourable.
“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 reduce sudden price movements that could immediately translate into higher transport fares and increased prices of goods.
“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,” he said.
Oyedele added that the ceiling would be reviewed monthly, with the figures published to promote transparency.
The Federal Government also announced measures to address other factors contributing to high transportation and logistics costs.
Under the 2025 tax reform laws, the government said it was working with state governments and security agencies to reduce the collection of road taxes and levies that add to the cost of transporting people and goods.
The government is also increasing funding for cash transfers to vulnerable households and subsidised credit for small businesses and consumers.
Another part of the package is an accelerated rollout of compressed natural gas (CNG), with the Federal Government working with state governments to expand its use in transportation.
The Presidency said CNG is between 60 and 70 per cent cheaper than petrol and expects transport operators to pass the savings on to passengers through lower fares.
The government is also considering an excess profit tax on operators found to be taking undue advantage of consumers anywhere along the energy value chain.
According to the Presidency, revenue generated from taxes on price gouging would be used exclusively to cushion the effect of fuel prices through transport support or vouchers for urban minimum-wage earners.
The Federal Government also plans to work with the National Assembly on enhanced tax relief for low-income earners under the 2027 Finance Bill.
It further announced plans to reduce regulatory costs and other forms of red tape that add to the cost of doing business and eventually contribute to higher prices of goods and services.
The Presidency said it was also investing in a National Strategic Fuel Reserve to protect the country from future energy supply shocks.
Under the proposed system, refined petroleum products would be released into the market under clear and published rules whenever global disruptions or artificial hoarding threaten supply and price stability.
The government stressed that the strategic reserve would not be used to restore petrol subsidy or impose fixed prices but would instead help prevent artificial scarcity, discourage market manipulation and reduce sudden price shocks.
The Presidency also announced plans to improve traffic and logistics management in major urban centres to reduce fuel consumption.
It said the newly launched address codes by the Nigerian Postal Service (NIPOST) would also help make logistics operations more efficient and reduce costs.
The statement reads in full:
STATEHOUSE PRESS RELEASE
NNPC RETAIL FORGOES PETROL PROFIT MARGIN TO OFFER SOME SUPPORT TO NIGERIAN HOUSEHOLDS AMID GLOBAL PETROL CRISIS; FG ANNOUNCES ADDITIONAL MEASURES
The Nigerian National Petroleum Company (NNPC) agreed today to forgo its petrol retail profit margin and sell to Nigerians at cost to cushion the impact of global crude oil price shocks and volatility on vulnerable households.
NNPC Retail, which already sells petrol at the lowest price in the market, will offer this new deal within the next 30 days. This means if NNPC’s landing cost is N1300, it will sell fuel to Nigerians, especially commercial vehicles, at the same price.
The company’s discount gesture, backed by President Bola Ahmed Tinubu, was among the raft of measures the Finance Minister and Coordinating Minister of the Economy, Taiwo Oyedele, announced today.
Oyedele said he hoped other marketers would take a cue from the NNPC, as the sharp rise in crude and petrol prices is not expected to last long.
Oyedele was emphatic that NNPC agreeing to sell at a discount must not be misinterpreted as the restoration of petrol subsidy, which ended on May 29, 2023.
In addition, Oyedele announced forward sales of crude to domestic refineries. As production rises and previously committed crude is freed up, this is expected to shield pump prices from global market volatility.
Oyedele also said the Federal Government is negotiating a ceiling of N1,350 a litre on the ex-gantry or landing cost of petrol, to keep pump prices stable. Where costs rise above the ceiling, refiners and importers will carry the shortfall and recover it later, when crude prices or the exchange rate allow, 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,” Oyedele said.
Oyedele also said that, under the 2025 tax reform laws, the Federal government, in collaboration with the states and security agencies, is reining in the collection of road taxes and levies that inflate fares and logistics costs.
The Federal government is also increasing funding for cash transfers to the most vulnerable households and subsidised credit for small businesses and consumers.
Other measures announced:
A faster CNG rollout:
The federal government is scaling up CNG deployment with the states. The government expects transporters to pass the savings on to passengers in lower fares. CNG is 60-70 per cent cheaper than petrol.
An excess profit tax:
This will be considered for operators who take undue advantage of consumers, anywhere along the energy value chain. The government said it will use proceeds from taxes on price gouging exclusively to cushion the impact of fuel prices through transport support or vouchers for urban minimum-wage earners, who are most vulnerable. The Federal Government will also work with the National Assembly to consider enhanced tax relief for low-income earners under the 2027 Finance Bill.
Less red tape: The Federal Government is cutting regulatory costs that feed into the cost of doing business and, indirectly, into higher prices of goods and services.
National Strategic Fuel Reserve:
To protect households and businesses from future energy shocks, the Federal Government is investing in a National Strategic Fuel Reserve. The government will release refined products into the market under clear, published rules whenever a global disruption or hoarding threatens supply and price stability. This is not a subsidy, and it does not fix prices; rather, it secures supply and reduces price volatility. It will prevent artificial scarcity, deter market manipulation, and anchor long-term energy security, so a deregulated market delivers stable growth rather than sudden price shocks.
Better traffic and logistics management:
Traffic management agencies will improve traffic flow, especially in major urban centres, to reduce fuel consumption. Also, NIPOST’s newly launched address codes will help make logistics more efficient and cheaper.
To be clear, none of these measures restores a blanket subsidy. Doing so would create longer-term harm for a short-term cure. Each measure is designed to reach the people who need help, without putting the wider economy at risk.
The Presidency acknowledged the challenges the people face over the high cost of fuel.
“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.”
“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.
“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.”
Bayo Onanuga
Special Adviser to the President
(Information & Strategy)
October 8, 2026
