The Federal Government has announced the introduction of price modulation in the petroleum industry to check rising prices of petroleum products in the country.
Minister of Finance and Coordinating Minister of the Economy, Prof. Taiwo Oyedele, announced the development on Thursday in Abuja while briefing journalists.
He said a negotiated ceiling of N1,350 per litre on the ex-gantry or landing cost of petrol has been introduced, subject to monthly review.
“Pump prices should not have to follow every swing in global crude or the exchange rate,” Oyedele said. “Where costs rise above the ceiling, refiners and importers will carry the shortfall and recover it later, when crude prices or the exchange rate allow, without breaching the ceiling.”
The minister stressed that the measure is not a return to subsidy. “This is neither a subsidy nor a price control. It is designed to smooth prices over time rather than suppressing them,” he said.
Explaining the reasoning behind the policy, he said, “N1,400 a litre today and N1,400 tomorrow is better than N1,500 today and N1,300 tomorrow, because volatility itself adds to uncertainty and cost.” The ceiling, he added, will be reviewed every month, reset where costs require, and the figures published for transparency.
Oyedele argued that rising prices are driven by a global supply shock and not by a domestic policy choice. He said shipping through the Strait of Hormuz was running at roughly 13 percent of its pre-war level by mid-September, while Brent crude is trading above 100 dollars a barrel, almost 50 percent higher than before the conflict.
On domestic prices, he said petrol sold for about N830 per litre before the conflict, when crude was near 70 dollars a barrel, but now averages about N1,400.
“That increase was caused by a global conflict in which we had no say. Ironically, without the removal of subsidy, the impact would have been far greater,” he said.
The minister acknowledged the burden on citizens. “Prices have risen, and Nigerians are feeling it. That concern is legitimate, and this government recognises it,” he said.
He noted, however, that fuel has remained available in every state. “In a crisis of this kind, availability is the first form of affordability,” he said.
Oyedele also addressed proposals to bring back subsidy, including one described as a production subsidy for local refining.
He said such a move would worsen the situation. “A subsidy does not lower the cost of fuel. It only changes how it is paid, and when,” he said.
According to him, Nigeria consumes roughly 50 million litres of petrol a day, and returning petrol to its pre-reform price would cost more than N20 trillion a year, before any allowance for inflated consumption and smuggling.
He added that even a N500 per litre price that some have promised would cost over N16 trillion annually.
He warned that a return to subsidy could weaken the naira. “Our estimate is that the exchange rate could approach 3,000 naira to the dollar within months, and so-called subsidised petrol would cost at least 2,000 naira a litre,” he said.
The minister said the government remains open to ideas but expects any proposal to answer three questions. “What will it cost? How will it be funded sustainably? And what pump price will it deliver?” he asked.
Beyond price modulation, Oyedele listed other measures the government is taking to ease the burden on Nigerians. These include a 30-day margin discount on petrol sold at NNPC Limited stations with priority for public transporters, forward sales of crude to domestic refineries, removal of illegal levies in collaboration with the states, and more funding for cash transfers to vulnerable households and subsidised credit to small businesses.
He also said the government will consider an excess profit tax on operators who take undue advantage of consumers, with proceeds to be used for transport support or vouchers for urban minimum wage earners.
Other measures include a faster rollout of compressed natural gas (CNG) vehicles, a National Strategic Fuel Reserve, reduced regulatory costs, and better traffic and logistics management.
Oyedele said the government will also work with the National Assembly on enhanced tax relief for low income earners under the 2027 Finance Bill.
“None of these measures restores a blanket subsidy. Each measure is designed to reach the people who need help, without putting the wider economy at risk,” he said.
He added that the Federal Government is working on a comprehensive package of fiscal measures to bring inflation down to single digits in the near term and promised to share further details in the coming months.
Earlier, the Minister of Information and National Orientation, Mohammed Idris, who opened the briefing, expressed the condolences of the Federal Cabinet to the families of security personnel who lost their lives in a recent attack, describing the loss as a national tragedy.
“The loss of these officers, especially the members of the Armed Forces, is a national tragedy,” he said. He noted that they worked day and night so that Nigerians could go about their lives in peace, and thanked them for their service.
Idris said the briefing was originally planned for two days earlier but was rescheduled out of respect for the national mourning.
He thanked the Minister of Finance and Coordinating Minister of the Economy for the consideration.
He said the Minister of Finance has consistently kept to the promise of President Bola Tinubu to engage Nigerians and keep them informed about government programmes and policies, especially those relating to the economy.
Idris noted that the briefing came barely a week after Nigeria marked its 66th year of independence, an occasion he said offered the country a chance to reflect on its journey, the challenges it is overcoming and the nation it is determined to build.
“At 66, Nigeria remains a nation of enormous potential, sustained by the resilience, enterprise and optimism of its people,” he said.
According to him, the economic reforms of the Tinubu administration are producing increasingly visible results, and the economy is on a stronger footing today than before. He said the stability being recorded rests on a solid foundation laid by the President, and that the gains of the reforms are meant to reach the dining table of every Nigerian man and woman while giving businesses a firm base to thrive.
The minister admitted that more work remains to be done. He said the goal of the government is an economy increasingly driven by production, investment and enterprise, where progress is measured not only by economic indicators but also by the opportunities available to young people, the strength of businesses, the productivity of families and industries, and the living standards of children.
Idris also spoke on the role of the media in the process. “We have a responsibility to interrogate facts, to ask necessary questions and to also help Nigerians understand the progress being made and the work that remains,” he said.
He urged journalists to ensure that their work promotes the unity, progress and prosperity of the country. “Nigeria is for all of us,” he said.
