NNPC Petrol Discount Not Fuel Subsidy, Oyedele Explains

The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, has clarified that the 30-day petrol discount introduced by the Nigerian National Petroleum Company Limited (NNPC) Retail does not amount to a return of fuel subsidy.

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Oyedele said the discount was being funded from NNPC Retail’s profit margin rather than public funds. According to him, the company purchases petrol from the Dangote Refinery and other suppliers at market prices before adding its retail margin to determine pump prices.

The minister explained that a retailer could temporarily reduce or forgo part of its profit margin to offer customers lower prices. He distinguished this from fuel subsidy, under which the government covers part of the cost of a product using public revenue. He added that the discounted price remained market-reflective and did not involve the government paying the difference.

Oyedele said the initiative would provide temporary relief to households, commuters and transporters following the removal of petrol subsidy in 2023. He also defended the decision as a commercial strategy consistent with NNPC Retail’s role in the distribution and sale of petroleum products across the country.

Addressing concerns that the price reduction could lower the company’s earnings and dividends to the Federation, Oyedele said increased sales volumes and customer loyalty could compensate for the reduced margin per litre. He argued that the strategy could potentially improve NNPC Retail’s overall profitability and increase dividends paid to the government.