NNPC Retail Petrol Discount Not Subsidy, No Public Funds Involved—Oyedele

By Adedapo Adesanya

The Minister of Finance and Coordinating Minister of the Economy, Mr Taiwo Oyedele, has said the petrol price discount introduced by the federal government is not a return of fuel subsidy, insisting that the initiative is being funded entirely by the company’s retail margin rather than public funds.

Mr Oyedele said the discount, which took effect on October 1, 2026, was a commercial decision by NNPC Retail Limited to reduce its profit margin and pass the savings to consumers amid high petrol prices.

In a statement on Friday, he explained that the arrangement differs from a fuel subsidy, under which the government uses public revenue to reduce the price consumers pay for petrol.

According to him, NNPC Retail purchases petrol from the Dangote Refinery and other suppliers at market prices before adding its retail margin to determine pump prices.

“The discount comes out of that margin alone, so the discounted pump price remains market-reflective,” he said.

The minister maintained that neither the federal government’s budget nor the Federation Account was being used to finance the price reduction.

He added that selling crude oil belonging to the Federation below market value would amount to a subsidy because the resulting shortfall would ultimately be borne by public revenue.

Mr Oyedele also dismissed concerns that the discount could undermine NNPC Limited’s profitability or reduce dividends paid to the federation.

He argued that increased sales volumes could offset the lower margin per litre, while the initiative could strengthen customer loyalty and improve the company’s long-term business performance.

“A smaller margin or temporary zero margin on each litre can be more than offset by selling more litres over time,” he said.

According to the minister, the strategy could ultimately increase NNPC Retail’s profits and the dividends paid to the Federation.

He further argued that the discount was unlikely to distort Nigeria’s domestic fuel market or encourage petrol smuggling into neighbouring countries, noting that retail margins account for less than five per cent of the pump price, while petrol prices in neighbouring countries are already 20 to 40 per cent higher than Nigeria’s.

Mr Oyedele said the discount was one of several government measures aimed at easing the impact of high fuel prices on households and businesses.

Other measures include expanding compressed natural gas-powered transportation, waiving taxes and duties on petrol, and eliminating illegal levies that increase transportation costs.

The finance minister said the measures were intended to provide relief to Nigerians without reversing the 2023 decision to end the petrol subsidy, which the government considers financially unsustainable.