NNPC RETAIL WAIVES PETROL PROFIT MARGIN AS FG ANNOUNCES MEASURES TO CUSHION GLOBAL FUEL PRICE SHOCK

 

The Nigerian National Petroleum Company (NNPC) Retail has agreed to forgo its petrol retail profit margin and sell Premium Motor Spirit (PMS) to Nigerians at cost as part of measures to cushion the impact of rising global crude oil and petrol prices.

The development was announced on Thursday, October 8, 2026, by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, as the Federal Government unveiled a series of measures aimed at protecting households and businesses from the effects of global energy market volatility.

Under the new arrangement, which will run for 30 days, NNPC Retail will sell petrol at its actual landing cost. For instance, if the company's landing cost is N1,300 per litre, it will sell the product at N1,300 per litre, particularly to support commercial transport operators and vulnerable consumers.

NNPC Retail, which already sells petrol at one of the lowest prices in the market, is taking the step with the backing of President Bola Ahmed Tinubu.

Oyedele expressed hope that other petroleum marketers would follow NNPC's example, noting that the current surge in crude oil and petrol prices is not expected to persist indefinitely.

He, however, stressed that the measure should not be interpreted as a return of the petrol subsidy, which was removed on May 29, 2023.

FG PROPOSES N1,350 LANDING-COST CEILING

The Minister also announced that the Federal Government is negotiating a ceiling of N1,350 per litre on the ex-gantry or landing cost of petrol as part of efforts to reduce sharp price fluctuations.

Under the proposed arrangement, where costs rise above the ceiling, refiners and importers would temporarily absorb the difference and recover it later when crude oil prices or exchange rates become more favourable.

Oyedele explained that the policy is designed to smoothen prices over time rather than suppress market prices.

He said the ceiling would be reviewed monthly, with updated figures published to promote transparency.

CRUDE SUPPLY TO DOMESTIC REFINERIES

The Federal Government is also introducing forward sales of crude oil to domestic refineries.

As crude oil production increases and previously committed volumes become available, the measure is expected to provide domestic refiners with greater supply certainty and help shield petrol prices from international market volatility.

MORE SUPPORT FOR VULNERABLE HOUSEHOLDS

According to the government, funding for cash transfers to the most vulnerable households will be increased, alongside subsidised credit for small businesses and consumers.

The government also plans to strengthen efforts to eliminate road taxes and levies that contribute to higher transportation and logistics costs.

FASTER CNG ROLLOUT

The Federal Government is accelerating the rollout of Compressed Natural Gas (CNG) in collaboration with state governments.

The government expects transport operators to pass the savings from cheaper CNG on to passengers through lower transport fares.

CNG is estimated to be 60–70 per cent cheaper than petrol.

EXCESS PROFIT TAX UNDER CONSIDERATION

The government is considering an excess profit tax on operators along the energy value chain who take undue advantage of consumers during periods of market disruption.

It said proceeds from any such measure would be used exclusively to cushion the impact of fuel prices through transport support or vouchers for urban minimum-wage earners.

The Federal Government will also work with the National Assembly to consider enhanced tax relief for low-income earners under the 2027 Finance Bill.

NATIONAL STRATEGIC FUEL RESERVE

The government is also investing in a National Strategic Fuel Reserve to protect households and businesses against future energy shocks.

Under the proposed framework, refined petroleum products could be released into the market under clear and publicly available rules whenever global disruptions, artificial scarcity or hoarding threaten supply and price stability.

The government said the reserve is not intended to fix prices or restore subsidies, but rather to strengthen energy security and reduce extreme price volatility.

IMPROVED TRAFFIC AND LOGISTICS MANAGEMENT

Traffic management agencies will also intensify efforts to improve traffic flow, particularly in major urban centres, in order to reduce fuel consumption.

The government further stated that NIPOST's newly launched address codes would help make logistics operations more efficient and reduce delivery costs.

FG: MEASURES DO NOT RESTORE FUEL SUBSIDY

The Federal Government reiterated that none of the measures announced represents a return to blanket petrol subsidy.

The Presidency acknowledged the difficulties Nigerians are facing as a result of high fuel prices but maintained that reversing the subsidy reform would create longer-term economic risks.

According to the Presidency, the objective is to ensure that the benefits of economic reforms reach more Nigerians more quickly and in tangible ways, while avoiding a return to the cycle of fuel scarcity, smuggling, currency pressure and fiscal challenges associated with the former subsidy regime.

The Federal Government also disclosed that it is working on a comprehensive package of fiscal measures aimed at bringing inflation down to single digits sustainably in the near term.

Bayo Onanuga

Special Adviser to the President

Information & Strategy

October 8, 2026