A public policy think-tank has defended the Nigerian government’s 30-day fuel rebate and forward crude sales strategy, dismissing claims that the measure marks a hidden return to state fuel subsidies.

The Independent Media and Policy Initiative (IMPI) issued a policy statement on Friday framing the temporary price ceiling as a self-funding shock absorber designed to cushion consumers against global energy market volatility linked to Middle East tensions.

The group contrasted the administration’s market-based framework with proposals by opposition leader Atiku Abubakar of the African Democratic Congress (ADC), warning that a return to budget-funded subsidies would risk fiscal instability and deter foreign energy investment.

How the price ceiling works

Under the government’s temporary arrangement, local refiners and importers have agreed to an ex-gantry landing price ceiling of 1,350 naira ($0.84) per litre of petrol, subject to monthly reviews.

IMPI Chairman Dr Omoniyi Akinsiju explained that the mechanism uses a forward crude pricing model to smooth out price spikes without drawing on public funds.

“The 1,350 naira ceiling is not a rigid price control but a smoothing mechanism,” Dr Akinsiju said.

If global benchmark prices temporarily drive the true landing cost up to 1,450 naira, local refiners absorb the 100-naira deficit. When global prices fall below the baseline, the surplus is harvested to balance previous shortfalls, ensuring the system remains self-funding.

Comparing policy approaches

IMPI likened the 30-day trial window to temporary energy relief measures deployed in Western economies, including Germany’s recent fuel discount program.

The think-tank argued that forcing oil producers to sell crude at mandatory government discounts—as advocated by opposition figures—would lead to contractual disputes, investor flight, and international litigation.

“The policy thrust is clear; this is a controlled trial period rather than a debt-inducing subsidy,” Dr Akinsiju said, noting that the national treasury remains protected from the multi-trillion naira deficits that previously characterized Nigeria’s fuel subsidy regime.