Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, has insisted that the 30-day petrol discount offered by Nigerian National Petroleum Company Limited (NNPC) Retail does not amount to a reinstatement of fuel subsidy.
Oyedele explained that the temporary price reduction was being financed entirely from NNPC Retail’s profit margin, without the use of government funds or public revenue.
The minister made this clarification in a statement on Friday after announcing that Nigerians would enjoy lower petrol prices at NNPC filling stations for 30 days.
He said the initiative was designed to provide temporary financial relief to households, commuters and transport operators while remaining consistent with the country’s market-based petroleum pricing system.
Oyedele explained that a margin discount occurs when a retailer voluntarily reduces or temporarily forgoes part of its profit margin to offer customers lower prices.
He contrasted this with fuel subsidy, under which the government uses public revenue to pay part of the cost of a petroleum product.
According to the minister, NNPC Retail purchases petrol from Dangote Refinery and other suppliers at market prices before adding its retail margin to determine the final pump price.
He stressed that the retailer alone bears the cost of the current discount and that the arrangement does not require the government to cover the difference between the market price and the reduced retail price.
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Oyedele also distinguished the initiative from selling crude oil owned by the Federation below market value, noting that such a practice could create a shortfall in public revenue.
Defending the company’s decision, he said NNPC Retail had a responsibility to support the nationwide availability, distribution and affordability of refined petroleum products.
He noted that the company had operated as a petroleum marketing and retail business for more than two decades and had historically sold petrol at prices below those of some other marketers.
The minister further addressed concerns that reducing the retail margin could affect NNPC Limited’s earnings and dividends payable to the Federation.
He argued that lower prices could attract more customers, increase sales volumes and strengthen customer loyalty, potentially compensating for reduced earnings per litre.
According to Oyedele, the strategy could ultimately improve the company’s overall profitability and support higher dividend payments to the Federation.
He maintained that the 30-day discount was a commercial decision intended to benefit consumers while supporting the company’s business objectives.
The minister reiterated that the initiative should not be interpreted as a reversal of the Federal Government’s 2023 decision to abolish fuel subsidy.
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