By SCM Reporter I Thursday, Oct.08, 2026
STATE HOUSE, ABUJA — In a bid to cushion the impact of rising global crude oil prices and market volatility on Nigerian households, the Nigerian National Petroleum Company (NNPC) Retail has agreed to forgo its retail profit margin for the next 30 days, selling petrol strictly at cost price.
The initiative, backed by President Bola Ahmed Tinubu, was announced on Thursday by the Minister of Finance and Coordinating Minister of the Economy, Mr. Taiwo Oyedele, as part of a comprehensive suite of interventions aimed at stabilizing fuel prices and providing relief to vulnerable citizens and commercial transporters.
Under the new arrangement, NNPC Retail—which currently offers the lowest pump prices in the country—will pass no retail markups to consumers. “This means if NNPC’s landing cost is N1,300, it will sell fuel to Nigerians, especially commercial vehicles, at the same price,” the official statement noted.
Price Ceiling and Price-Smoothing Mechanism
Addressing concerns over market volatility, Minister Oyedele revealed that the Federal Government is negotiating a ceiling of N1,350 per litre on the ex-gantry or landing cost of petrol.
Under this setup, refiners and importers will absorb any temporary cost overruns above the N1,350 threshold, recovering the shortfall later when exchange rates or crude prices soften.
Oyedele emphasized that the policy does not constitute a return to the petrol subsidy scrapped on May 29, 2023, nor does it represent price control.
”This is neither a subsidy nor a price control: it is designed to smooth prices over time rather than suppressing them,” Oyedele stated. “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 price ceiling will undergo monthly reviews, with full financial disclosures published to maintain transparency. Furthermore, forward sales of crude to domestic refineries are being implemented to shield domestic pump prices as national production gains momentum.
Excess Profit Tax and Relief Measures
To discourage exploitation across the energy value chain, the government is considering an excess profit tax targeting operators who engage in price gouging. Revenue generated from this levy will be channeled into direct transport support and vouchers for urban minimum-wage earners.
Additionally, the Federal Government plans to collaborate with the National Assembly to incorporate enhanced tax relief for low-income earners under the 2027 Finance Bill.
Other key measures announced in the intervention package include:
Strategic Fuel Reserve: The Federal Government is investing in a National Strategic Fuel Reserve to secure domestic supply, prevent artificial scarcity, and release refined products into the market during severe global disruptions.
Accelerated CNG Rollout: Scaling up Compressed Natural Gas (CNG) infrastructure in partnership with state governments. Transporters utilizing CNG—which is 60 to 70 percent cheaper than petrol—are expected to translate these savings into lower passenger fares.
Transport & Logistics Overhaul: Streamlining road taxes under the 2025 tax reform laws to curb illegal levies inflating transportation fares, alongside leveraging NIPOST’s newly launched address codes to optimize delivery networks.
Social Safety Nets & Credit: Increasing allocation for cash transfers targeted at vulnerable households and expanding subsidized credit facilities for small businesses.
Regulatory Cost Reduction: Cutting administrative red tape to reduce overall business operating expenses.
No Return to Fuel Subsidy
Clarifying the government’s stance, Special Adviser to the President on Information and Strategy, Bayo Onanuga, reaffirmed that the administration will not reinstate blanket fuel subsidies.
”Removing the fuel subsidy came at a price. But the alternative has been tried,” Onanuga noted. “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.”
The Presidency acknowledged the ongoing economic challenges faced by citizens and assured the public that a broader fiscal package is currently being finalized to sustainably reduce inflation to single digits in the near term.