Taiwo Oyedele
BREAKING: FG Unveils 10 Measures to Cushion Fuel Price, Inflation Pressures
The Federal Government has announced a 10-point intervention package aimed at cushioning the impact of rising petrol prices, transportation costs and inflation on households and businesses while maintaining its broader economic reform programme.
Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, announced the measures on Thursday during a media briefing in Abuja, acknowledging that Nigerians were still facing significant pressure despite various reforms introduced by the administration.
Oyedele said the interventions include a 30-day petrol discount at NNPC stations, forward sales of crude oil to domestic refineries, a proposed ₦1,350-per-litre modulation on petrol landing costs, faster deployment of Compressed Natural Gas (CNG) vehicles, removal of selected levies, targeted support for vulnerable households and small businesses, and the establishment of a National Strategic Fuel Reserve.
He stressed, however, that the measures should not be interpreted as a return to the former petrol subsidy regime, which he said created significant fiscal and market distortions.
“To be perfectly clear, none of these measures restore a blanket subsidy. To do so would amount to creating longer-term harm for a short-term cure,” Oyedele said.
According to him, the government’s objective is to provide immediate relief while protecting consumers from sharp price movements without recreating the long-term fiscal burden associated with fuel subsidies.
The first intervention is a 30-day discount on petrol sold through NNPC Limited retail stations, with public transport operators expected to receive priority.
Oyedele said the measure was designed to provide immediate relief to transport operators and commuters affected by rising fuel costs.
“It is not a subsidy. Government is just saying we sell to you at a discount,” he explained.
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The minister did not immediately disclose the exact amount of the discount or a single nationwide pump price that would apply during the 30-day period.
The second measure involves forward sales of crude oil to domestic refineries as crude production increases and previously committed volumes become available.
Oyedele said the arrangement would provide domestic refiners with greater certainty over crude supply and reduce their exposure to sudden movements in international crude prices.
Under the proposed arrangement, the government could agree to sell crude to refiners at a predetermined price for a specified period, enabling them to plan their operations and manage costs more effectively.
“If you can sell your crude forward, we sell to the refiners for the next six months. We are selling you crude at $80 per barrel, for example. That preserves your budget, provides certainty to the refiners and price stability to the consumer,” he said.
The third intervention is a price-modulation mechanism under which the government is negotiating a ceiling of ₦1,350 per litre on the landing or ex-gantry cost of petrol.
The objective is to prevent domestic petrol prices from responding immediately to every movement in international crude prices or the foreign-exchange market.
Under the proposed mechanism, when the actual cost rises above the agreed ceiling, refiners and importers would initially absorb the difference and recover it when market conditions improve.
Oyedele stressed that the arrangement was neither a subsidy nor conventional price control but a mechanism designed to smooth out price movements.
He explained that greater price stability would be preferable to sharp increases followed by uncertain reductions.
The proposed ceiling would be reviewed monthly, with relevant calculations and data expected to be published to promote transparency.
The ₦1,350 figure is therefore a proposed landing-cost or ex-gantry ceiling, rather than a declaration that petrol will sell at ₦1,350 per litre at every filling station nationwide.
The fourth intervention focuses on reducing dependence on petrol through CNG and other alternative energy sources.
Oyedele said more than 120,000 vehicles were already operating on CNG, supported by more than 400 conversion centres, 96 refuelling stations and 18 unified CNG stations.
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He added that the government had deployed hundreds of CNG buses, with commuters in areas where the buses operate benefiting from fare reductions of between 30 and 50 per cent.
The government has also removed taxes on electric vehicles and solar equipment and reduced import duties on vehicles as part of efforts to encourage the adoption of cheaper and cleaner alternatives to petrol.
According to Oyedele, Nigeria Customs Service data showed that imports of CNG-powered vehicles, including tricycles, electric vehicles and renewable-energy equipment, had more than doubled since May 2023.
He said the government had also granted tax and duty waivers worth more than ₦100 billion within the first nine months of the current intervention period.
The fifth measure involves the removal of levies and charges that increase transportation and logistics costs.
Oyedele said the Federal Government was working with state governments under the new tax laws to eliminate unnecessary charges that ultimately raise the cost of moving people and goods.
The government also plans to strengthen cash transfers to vulnerable households and provide subsidised credit to small businesses and consumers facing higher operating and living costs.
The sixth intervention is an accelerated nationwide CNG infrastructure rollout.
Oyedele said the Federal Government would work with state governments to expand CNG deployment and urged transport operators to pass the savings from cheaper fuel on to passengers through lower fares.
The government wants the initiative to gradually reduce dependence on petrol while giving commuters access to cheaper transportation.
The seventh measure is the proposed introduction of an excess-profit tax on operators found to be taking undue advantage of prevailing market conditions at the expense of consumers.
Oyedele said proceeds from the proposed measure could be used to cushion the impact of food prices through transport support or vouchers targeted at vulnerable urban households and wage earners.
“We will collect it from them and give to the vulnerable people,” he said.
The minister added that the Federal Government would work with the National Assembly on enhanced tax relief for low-income earners under the 2027 Finance Bill.
The eighth intervention targets regulatory costs and red tape that increase the cost of doing business and are eventually passed on to consumers through higher prices.
Oyedele said the government had commenced discussions with regulatory agencies to identify unnecessary costs and processes that could be eliminated.
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The ninth measure is the establishment of a National Strategic Fuel Reserve to protect households and businesses from supply disruptions, artificial scarcity and excessive price volatility.
According to Oyedele, refined petroleum products would be released into the market under clear and publicly published rules whenever global disruptions, hoarding or other factors threatened supply and price stability.
He stressed that the reserve would not be used to fix petrol prices or subsidise the product.
“This is not a subsidy, and it does not fix prices. Rather, it secures supplies and reduces price volatility,” he said.
The reserve is expected to strengthen Nigeria’s energy security, reduce the risk of artificial scarcity and provide a buffer during periods of major supply disruption.
The 10th intervention focuses on traffic management and logistics, particularly in major urban centres.
Oyedele said traffic management agencies would be expected to improve traffic flow to reduce fuel consumption and transportation costs.
He also cited the recently launched digital addressing system as part of efforts to make logistics more efficient and reduce the cost of moving goods and services.
Beyond the 10 measures, Oyedele said the government was continuing other interventions aimed at reducing pressure on household energy and food costs.
He said the government continued to support electricity for vulnerable consumers and was also working to improve gas and fertiliser supply for producers.
Oyedele said the Federal Government had granted a full waiver of taxes and duties on petrol worth more than ₦3.3 trillion up to September 30, 2026, as part of measures to reduce the cost burden on consumers.
He said the government’s approach was broadly consistent with international responses to energy-price shocks, which increasingly favour targeted support, tax adjustments, improved energy efficiency and supply security over broad-based subsidies.
The minister acknowledged that the measures already implemented had not completely eliminated the pressure on households.
“We recognise that these measures, important as they are, do not fully relieve the pressure households feel today,” he said.
Oyedele nevertheless maintained that returning to a blanket petrol subsidy would not provide a sustainable solution, arguing that Nigeria had previously experienced fuel scarcity, smuggling, currency pressures and significant fiscal difficulties under the system.
“Because fuel is real, I will not dismiss it. The cost of reform came at a price, and many households are still bearing it,” he said.
He added that the government was working on a broader package of fiscal measures aimed at bringing inflation down to single digits sustainably in the near term.
Further details of the fiscal package, he said, would be released in the coming months.
The latest measures come as petrol prices remain a major driver of transportation and household costs, with changes in global crude prices, exchange rates, refinery pricing and distribution expenses continuing to affect the domestic market.
The government says it will continue to monitor developments in the energy market and introduce further interventions where necessary, while avoiding policies that could recreate the long-term fiscal pressures associated with petrol subsidies.
Oyedele said the ultimate objective was to combine immediate relief with structural reforms that would reduce Nigeria’s vulnerability to energy-price shocks, lower transportation costs, strengthen domestic refining and improve energy security.
He said the Federal Government remained committed to ensuring that the benefits of the economic reforms translated into tangible improvements in the living conditions of Nigerians.
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