Nigeria’s government has announced a suite of temporary emergency measures to curb soaring petrol prices, including directing state oil firm NNPC Retail to forgo its profit margins for 30 days and sell fuel at cost.
The government is also negotiating an ex-gantry price ceiling of 1,350 naira ($0.82) per litre. Under the proposed cap, refiners and importers would absorb shortfalls when global oil prices spike and recover those costs later when market conditions ease.The moves come as President Bola Tinubu faces mounting domestic pressure over high inflation and transport costs following his landmark decision to abolish the country’s decades-old, multi-billion-dollar petrol subsidy in May 2023.
Finance Minister Taiwo Oyedele insisted the new measures do not mark a return to government fuel subsidies or rigid price controls, describing the mechanism as temporary “price smoothing” designed to shield consumers from international volatility.”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,” Mr. Oyedele said in a statement released by the presidency on Thursday. The government also outlined further interventions, including: Crude oil forward sales to domestic refineries to ensure steady supply and insulate local pump prices.
A proposed “excess profit tax” on energy sector operators accused of price-gouging, with proceeds earmarked for transport vouchers for urban low-income workers.
Accelerated rollout of Compressed Natural Gas (CNG) for public transit, which officials say is 60% to 70% cheaper than petrol.The creation of a National Strategic Fuel Reserve to prevent supply disruptions and artificial scarcity.Subsidies previously swallowed a massive portion of Nigeria’s national budget, constraining government spending on infrastructure and health. While market reform was praised by international lenders like the IMF, the immediate removal of the subsidy—coupled with currency devaluation—sent fuel prices and living costs surging for millions of ordinary Nigerians. The presidency acknowledged the ongoing economic pain but reiterated that a permanent return to blanket subsidies remained out of the question.
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