The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele has clarified that the recent petrol price cut at Nigerian National Petroleum Company Limited, NNPC, retail outlets is not a reinstatement of fuel subsidy.
On Friday, October 9, 2026, Finance Minister and Coordinating Minister of the Economy, Taiwo Oyedele, issued a statement clarifying that the petrol discount introduced at NNPC Retail stations on October 1 is funded through the company’s retail margin, not government subsidy.
Oyedele explained that NNPC Retail Limited purchases petrol from the Dangote Refinery and other suppliers at market prices before adding its retail margin to determine pump prices.
He said the discount comes from that margin alone, with the company absorbing the reduction rather than relying on government funding.
“A margin discount means the retailer chooses to take a smaller margin, or no margin at all for a period, and passes the saving to the customer,” Oyedele said.
He distinguished the arrangement from a fuel subsidy, explaining that a subsidy involves government using public revenue to cover part of the price paid by consumers.
“A subsidy is different. It is when government pays part of the price It is when government pays part of the price the consumer would otherwise pay,” he said.
The administration ended the previous fuel subsidy regime in 2023, and Oyedele maintained that the current discount does not represent a reversal of that policy.
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He noted that the initiative could also serve NNPC Retail’s commercial interests by attracting more motorists, boosting sales volumes, and fostering customer loyalty.
According to him, higher overall sales could balance out reduced margins per litre and ultimately strengthen the company’s profitability and its ability to pay dividends to the Federation.
Oyedele maintains that NNPC Retail’s role includes ensuring the nationwide availability of petroleum products and helping moderate retail prices.
NNPC Retail Limited, a wholly owned subsidiary of NNPC Limited, began operating more than two decades ago as a petroleum marketing and retail company.
The minister also argued that the reduction was unlikely to create significant market distortions or encourage petrol smuggling across Nigeria’s borders.
“The retail margin on petrol is less than 5 percent of the pump price,” he said, adding that petrol prices in neighbouring countries were already between 20 and 40 per cent higher than those in Nigeria.
The Federal Government acknowledged that fuel prices continue to place pressure on households and businesses.
Oyedele said other measures to ease the burden include expanding compressed natural gas, CNG, transport, waiving taxes and duties on petrol, and removing illegal levies that increase transport costs.
He said the measures were intended to provide relief to consumers without returning the country to a fuel subsidy system.
ARISE NEWS
