𝐍𝐍𝐏𝐂 𝐑𝐞𝐭𝐚𝐢𝐥 𝐃𝐢𝐬𝐜𝐨𝐮𝐧𝐭 𝐍𝐨𝐭 𝐒𝐮𝐛𝐬𝐢𝐝𝐲 -Oyedele Clarifies

The Minister of Finance and Coordinating Minister of the Economy, Prof. Taiwo Oyedele, has clarified that the negotiated 30-day petroleum price discount by the Nigerian National Petroleum Company Limited (NNPC Ltd.) was not a return of fuel subsidy as being debated by some commentators.

Prof. Oyedele’s clarification follows the announcement made on Thursday in Abuja, while briefing journalists on some of the measures taken by the Federal Government to ameliorate the current hardship in the country.

He explained that motorists have been paying less for petrol at NNPC Retail Limited stations since 1 October 2026, following a discount on the company’s retail margin. According to him, “a margin discount and a subsidy are not the same.”

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Prof. Oyedele said every marketer adds a margin to the price it pays for the fuel it sells. “A margin discount means the retailer chooses to take a smaller margin, or no margin at all for a period, and passes the savings to the customer,” he said, adding that “the cost of the discount is borne by the retailer alone.”

A subsidy, he stressed, is different because it involves the government paying part of the price the consumer would otherwise pay.

“That money comes from public revenue, funds that would otherwise go to salaries, schools, hospitals and infrastructure,” he said. “That is the regime this administration ended in 2023, and it is not coming back.”

The Minister said the discount is not funded by the federal budget or the Federation Account. He explained that NNPC Retail buys petrol from the Dangote Refinery and other suppliers at market prices, on commercial terms, and then adds its retail margin to set the pump price.

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

He drew a distinction with crude oil owned by the Federation, noting that selling the nation’s crude below market price “would amount to a subsidy, because the shortfall would be borne by public revenue.”

Prof. Oyedele recalled that NNPC Retail Limited, a wholly owned subsidiary of NNPC Limited, began operations over 20 years ago as a petroleum marketing and retail company.

It was established to ensure the nationwide availability, distribution and affordability of refined petroleum products.

“Its purpose, in other words, is to keep products available across the country and to moderate retail prices, not necessarily to maximise retail profit,” he said.

He added that the company has historically sold fuel below the prices of other marketers, and that the current discount “continues that role.” In his words, it is “a commercial decision that any retailer is free to make.”

Responding to concerns that a lower margin could mean lower profits for NNPC Ltd and, by extension, lower dividends to the Federation, the Minister said this need not happen.

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

He added that a discount builds customer loyalty that lasts well beyond the discount period.

“Together, these can raise NNPC Retail’s profits, and the dividends paid to the Federation: a win-win for consumers and for the government,” he said, noting that margin discounts are “a routine commercial strategy, used by retailers the world over.”

On fears that cheaper petrol could fuel cross border smuggling, Prof. Oyedele said the retail margin on petrol is less than 5 percent of the pump price.

“A discount within that margin cannot meaningfully widen the gap between prices in Nigeria and in neighbouring countries, where petrol already costs 20 to 40 percent more,” he said.

He concluded that the measure “creates no new incentive for smuggling, and no distortion of the kind that subsidy regimes produced in the past.”

Summing up, the Minister said: “A subsidy spends public money to lower the price of fuel. The NNPC Retail discount lowers the price without spending any public money, and it can strengthen NNPC Retail’s business at the same time.”

Prof. Oyedele acknowledged that fuel prices continue to weigh on households and businesses. “We recognise that fuel prices continue to weigh on households and businesses,” he said, explaining that the discount is one of several measures the government is pursuing to ease the burden.

Others include the expansion of CNG transport, the waiver of taxes and duties on petrol, and the removal of illegal levies that inflate transport costs.

“Each is designed to bring relief without returning Nigeria to a subsidy regime that the country can no longer afford,” he said.