The Federal Government has defended the Nigerian National Petroleum Company (NNPC) Limited’s 30-day petrol discount scheme amid criticism from opposition groups, which have questioned its sustainability, reach and timing.
The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, said the initiative was being funded from NNPC Retail’s marketing margin rather than public funds, insisting that the measure should not be confused with a return to petrol subsidy.
The discount, which commenced on October 1, is intended to provide temporary relief to motorists following a sharp rise in petrol prices. However, opposition figures have dismissed the move as inadequate, arguing that it offers little assurance of lasting relief to Nigerians struggling with high transportation and living costs.
Speaking on the initiative, Oyedele explained that the discount was being taken from the company’s retail margin, which accounts for less than five per cent of the pump price.
He said the amount of the reduction per litre had not been fixed, as it would depend on the prevailing costs and margins. The arrangement, according to him, would be reviewed after 30 days.
The minister expressed hope that other fuel marketers would voluntarily reduce their margins to ease the pressure on consumers.
He also played down concerns that the discount could encourage cross-border smuggling, noting that petrol prices in neighbouring countries were between 20 and 40 per cent higher.
Oyedele said the government remained committed to the deregulation of the downstream petroleum sector, warning that a return to the former subsidy regime would impose a heavy burden on public finances.
According to him, the removal of petrol subsidy released N15.8 trillion to the Federation Account between June 2023 and December 2025, while the government waived more than N3.3 trillion in petrol-related taxes and duties between January and September 2026.
He said petrol prices had risen from about N830 per litre to an average of N1,400 following disruptions associated with the conflict in the Middle East.
Restoring the subsidy, he added, could cost the country more than N20 trillion annually.
The minister argued that the government was pursuing alternative measures to cushion the effects of higher fuel prices without reversing the reforms.
Opposition questions sustainability
The opposition has, however, challenged the government's explanation, describing the discount as a short-term intervention that does not address the underlying pressures driving up petrol prices.
Phrank Shaibu, spokesperson for the African Democratic Congress (ADC) Presidential Campaign Council associated with former Vice-President Atiku Abubakar, described the initiative as a “panic-driven publicity stunt”.
Shaibu questioned what would happen after the 30-day period, arguing that the government had not provided a clear plan for sustaining relief beyond the temporary arrangement.
He also faulted the apparent concentration of the discount on NNPC retail outlets, questioning whether the initiative would provide meaningful relief to motorists who patronise independent marketers.
The ADC representative argued that the government should consider a transparent, capped and budgeted support mechanism for domestically refined petrol rather than rely on a temporary reduction in retail margins.
The Obidient Movement also criticised the initiative, with its Director of Media and Communications, Onyeka Dike, questioning why the government had waited more than three years after the removal of the subsidy to introduce the measure.
Dike said the hardship Nigerians had endured was not inevitable, declaring: “The pains were never necessary. They were policy choices.”
The New Democratic Congress (NDC) described the discount as “tokenism and a Greek gift”.
The party’s National Publicity Secretary, Osa Director, questioned the capacity of NNPC filling stations to deliver relief on a scale large enough to make a significant difference to consumers nationwide.
The APM Presidential Campaign Organisation, through its Director, Richard Ihediwa, also criticised the reported N60-per-litre reduction, describing the initiative as politically motivated and limited in scope.
Ihediwa argued that a discount restricted to NNPC stations and lasting only one month would not adequately address the financial difficulties confronting households and businesses.
Presidency outlines wider measures
The Presidency has outlined a broader package of measures aimed at moderating the impact of rising fuel costs and preventing the increase from worsening inflation and transportation expenses.
In a statement, the President's spokesman, Bayo Onanuga, said the NNPC would sell petrol at landing cost as part of the government's efforts to ease pressure on consumers.
The administration also proposed a ceiling of N1,350 per litre on ex-gantry or landing costs. Under the arrangement, any shortfall arising when prices exceed the ceiling would initially be borne by refiners or importers and recovered later when market conditions improve.
Onanuga said the arrangement was intended to smooth price increases rather than reintroduce a subsidy or impose permanent price controls.
Other measures outlined by the government include the expansion of compressed natural gas (CNG) as an alternative to petrol, cash transfers to vulnerable households, subsidised credit, and efforts to eliminate illegal levies that increase the cost of doing business.
The government is also considering forward crude sales to domestic refiners and a possible excess-profit tax to finance vouchers or transport support.
Further measures include tax relief provisions under the 2027 Finance Bill and efforts to improve traffic management and logistics efficiency to reduce transportation costs.
The government maintains that the measures are designed to provide relief while preserving the gains it says have resulted from the removal of the petrol subsidy.
Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, has separately argued that restoring the former subsidy would be illegal under the Petroleum Industry Act.
He said deregulation was necessary to encourage domestic refining and allow market competition to develop in the downstream sector.
Experts urge transparency
While some industry stakeholders have welcomed the discount as a temporary intervention, others have questioned whether the government's proposed price ceiling would offer sufficient relief.
Jeremiah Olatide, chief executive of PetroleumPrice.ng, welcomed the discount but argued that the proposed N1,350-per-litre ceiling was too high. He suggested that a ceiling of N1,000 per litre would offer consumers more substantial relief.
Professor Emeritus Wumi Iledare said temporary support could be justified if it was carefully targeted and transparently administered.
However, he warned that the arrangement could amount to a subsidy if NNPC sold petrol below its economic cost and the government reimbursed the company or taxpayers ultimately absorbed the resulting liabilities.
Iledare called for the government to disclose the discount per litre, the volume of petrol covered by the scheme, its funding mechanism and the maximum potential fiscal exposure.
He also urged the authorities to establish a transparent price ceiling, provide for independent auditing and publish a clear exit plan.
The professor cautioned that giving NNPC a pricing advantage over competing marketers could distort competition in a market the government says it wants to liberalise.
NNPC Group Chief Executive Officer, Bayo Ojulari, said the discount had commenced following the necessary approvals around October 1.
He said the company was prioritising market stability and consumer welfare over immediate profit considerations.
Government highlights alternative energy and tax reforms
Beyond the petrol discount, the government has continued to promote CNG as a cheaper alternative for motorists and commercial transport operators.
Ismael Ahmed, chairman of the Presidential Initiative on Compressed Natural Gas, said about 120,000 vehicles had been converted to run on CNG, with conversion costs ranging from N230,000 to N580,000.
The government has also sought to reduce the burden of multiple taxation and levies on businesses.
Olusegun Adesokan, executive secretary of the Joint Tax Board, said 20 states had adopted harmonised taxes and levies as part of efforts to address overlapping charges.
The Nigeria Customs Service has also announced reductions in import duties on vehicles. Comptroller-General of Customs Adewale Adeniyi said the duty on new vehicles had been reduced from 20 per cent to 10 per cent, while that on used vehicles had fallen from 15 per cent to five per cent.
The service is also pursuing measures to combat smuggling and improve compliance with import regulations.
Minister of Information and National Orientation, Mohammed Idris, said the government's economic reforms were intended to strengthen public finances and improve living standards over time.
Meanwhile, the Permanent Secretary in the Ministry of Finance, Raymond Omachi, called for better coordination among government agencies to eliminate overlapping responsibilities and reduce regulatory costs.
Despite these measures, the petrol discount has exposed continuing disagreement over how the government should respond to the cost-of-living crisis.
While the administration insists that temporary relief can be provided without returning to subsidy payments, opposition parties argue that the initiative is too limited to address the wider consequences of higher fuel prices.
The central question remains whether the 30-day discount will provide meaningful relief to consumers or prove to be a temporary intervention in a market where petrol prices continue to exert pressure on household budgets and business costs.
Leave a Reply