Nigeria's state oil company to sell petrol at cost for 30 days
The presidency says NNPC stations will give up their retail margin as crude passes $100 a barrel. It insists this is not the return of the subsidy.
Abuja — Petrol stations owned by Nigeria's state oil company will sell fuel at cost for 30 days, the presidency has announced, in a move meant to soften the effect of a surge in world oil prices, Premium Times reports.
Bayo Onanuga, spokesperson to President Bola Tinubu, said NNPC Retail would sell at its landing cost, giving up its retail profit margin. "If NNPC's landing cost is N1,300, it will sell fuel to Nigerians … at the same price," the statement said.
Why now
Crude oil has risen above $100 a barrel as conflict involving the United States, Israel and Iran disrupts shipping through the Strait of Hormuz. Nigeria exports crude but still depends heavily on the world price for the petrol its drivers buy.
The announcement follows the finance minister's warning on Thursday, which we reported, that restoring the old petrol subsidy would cost more than ₦20 trillion a year.
The other measures
The government listed further steps:
- negotiating a ceiling of ₦1,350 a litre on the price at the depot gate
- selling crude forward to domestic refineries
- speeding up the switch to compressed natural gas, which it says is 60% to 70% cheaper than petrol
- possible taxes on excess profits made by fuel operators
- a National Strategic Fuel Reserve
- wider cash transfers for vulnerable households
Subsidy or not?
Critics have called the discount a subsidy by another name. The presidency rejects that, describing it as a temporary way of managing volatile prices. The subsidy itself was removed on 29 May 2023.
This report is based on reporting by Premium Times.
