By Ayomide Otitoju
The Federal Government is negotiating a ceiling of ₦1,350 per litre on the ex-gantry or landing cost of petrol as part of measures to cushion the impact of rising fuel prices on Nigerians and stabilise pump prices.
The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, disclosed this on Thursday during a briefing on fuel prices and subsidy-related issues in Abuja.
Oyedele said the government was introducing additional measures because existing interventions had not fully eased the pressure on households and businesses from rising fuel and transportation costs.
Under the proposed price modulation mechanism, the ₦1,350-per-litre ceiling would be subject to monthly reviews. The minister clarified that the proposed limit did not mean petrol would sell for that amount at filling stations.
Instead, the arrangement is intended to prevent fluctuations in global crude oil prices and exchange rates from immediately translating into corresponding changes in petrol prices.
“Pump prices should not have to follow every swing in global crude or the exchange rate. The government is negotiating a ceiling of ₦1,350 a litre on the ex-gantry or landing cost of petrol to keep pump prices stable,” Oyedele said.
He explained that if costs exceeded the ceiling, refiners and importers would initially absorb the difference and recover it later when market conditions permitted.
According to the minister, the arrangement is neither a subsidy nor price control but a mechanism to moderate price fluctuations over time.
“The reasoning is simple: ₦1,400 a litre today and ₦1,400 a litre tomorrow is better than ₦1,500 a litre today and ₦1,300 a litre tomorrow,” he said, adding that volatility creates uncertainty and increases costs.
As part of the broader response, the government plans to introduce a temporary margin discount on petrol sold by the Nigerian National Petroleum Company Limited (NNPC Ltd) for an initial 30 days, prioritising public transport operators nationwide.
Oyedele said the discount would not amount to a return to fuel subsidy but would involve selling petrol at cost.
The government is also exploring forward crude oil sales to local refiners as domestic production increases. The arrangement is intended to free up committed crude supplies and reduce the exposure of pump prices to global market fluctuations.
Other planned measures include working with state governments to eliminate illegal levies and road-use charges that increase transportation costs, expanding cash transfers to vulnerable households and providing more direct credit support to small businesses.
The government also intends to accelerate the deployment of compressed natural gas (CNG) for transport operators, with the expectation that lower operating costs would translate into reduced fares for commuters.
Oyedele said sanctions could be imposed on operators found exploiting consumers, while proceeds from enforcement actions would be channelled into transport support.
Additional proposals include an excess profits tax, targeted vouchers for low-income earners and measures to reduce regulatory costs and red tape that contribute to higher prices for goods and services.
The government also plans to establish a national strategic fuel reserve to strengthen supply security and guard against disruptions and hoarding. Improved traffic management and logistics are expected to help reduce fuel consumption.
Oyedele added that the government would leverage NIPOST address codes to help lower logistics costs.
He said the measures would be expanded in collaboration with state governments, with the aim of directing assistance to those who need it most without placing additional pressure on the wider economy.
