By our Reporter
The Nigerian National Petroleum Company (NNPC) Limited has agreed to forgo its petrol retail profit margin and sell the product at cost for 30 days as part of Federal Government measures to cushion the impact of rising global oil prices on Nigerian households.
The decision, backed by President Bola Ahmed Tinubu, was announced by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, on Thursday, October 8, 2026, alongside other measures to address the rising cost of petrol, transportation and essential goods.
Under the arrangement, NNPC Retail will sell petrol at its landing cost without adding its retail profit margin, particularly to support vulnerable households and commercial transport operators. For instance, if the company’s landing cost is ₦1,300 per litre, it will sell at the same price.
Oyedele expressed hope that other fuel marketers would adopt a similar approach, noting that the recent surge in global crude oil and petrol prices was not expected to last long. He, however, stressed that the initiative should not be interpreted as a return to petrol subsidy, which the Federal Government abolished on May 29, 2023.
The minister also announced that the government was negotiating a ceiling of ₦1,350 per litre on the ex-gantry or landing cost of petrol to moderate pump-price fluctuations. Under the proposed arrangement, refiners and importers would bear costs above the ceiling and recover the difference later when crude oil prices or exchange rates become favourable. The ceiling would be reviewed monthly, with the applicable figures published for transparency.
According to Oyedele, the government is also introducing forward sales of crude oil to domestic refineries to improve supply predictability and reduce the exposure of local petrol prices to global market volatility. He explained that the measures were designed to smooth out price fluctuations rather than impose price controls or reinstate subsidies.
Other measures include increased funding for cash transfers to vulnerable households, subsidised credit for small businesses and consumers, and a faster rollout of compressed natural gas (CNG) in collaboration with state governments. The government expects transport operators to pass on the savings from CNG, which it says is 60 to 70 per cent cheaper than petrol, through reduced fares.
The Federal Government is also considering an excess-profit tax on operators found to be taking undue advantage of consumers across the energy value chain. Proceeds from such taxes, according to the announcement, would be dedicated to transport support or vouchers for vulnerable urban minimum-wage earners. The government will also work with the National Assembly to consider additional tax relief for low-income earners under the 2027 Finance Bill.
In addition, the government said it was working with state governments and security agencies to curb the collection of road taxes and levies that increase transportation and logistics costs. It is also reducing regulatory costs associated with doing business and improving traffic management in major urban centres to reduce fuel consumption. The newly introduced address codes by the Nigerian Postal Service (NIPOST) are expected to improve logistics efficiency and lower delivery costs.
To strengthen the country’s response to future energy disruptions, the government announced plans to invest in a National Strategic Fuel Reserve. Under the proposed system, refined petroleum products would be released into the market under published rules whenever global supply disruptions or hoarding threaten availability and price stability.
The Presidency acknowledged the hardship Nigerians face over rising fuel prices but maintained that restoring a blanket subsidy would expose the economy to renewed fiscal pressures, fuel scarcity, smuggling and currency instability.
It said the government’s objective was to preserve the gains of economic reforms while ensuring that relief reached more Nigerians quickly and tangibly. The Presidency also disclosed that a comprehensive package of fiscal measures was being developed to bring inflation down to single digits sustainably in the near term.
