The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, has said the discount on petrol prices by NNPC Retail Limited does not amount to a return of fuel subsidy, insisting that no public funds are being used to finance the initiative.
Oyedele explained that the discount, which took effect on October 1, 2026, was achieved by reducing the company’s retail profit margin rather than selling petrol below market prices with government support.
In a press release issued on Friday, the minister said the initiative would provide relief to households, commuters and transporters while potentially strengthening NNPC Retail’s business and profitability.
He said a retail margin discount was fundamentally different from a subsidy, which involves government paying part of the price consumers would otherwise pay.
“That is the regime this administration ended in 2023, and it is not coming back,” he said.
According to Oyedele, NNPC Retail purchases petrol from the Dangote Refinery and other suppliers at market prices and on commercial terms before adding its retail margin to determine pump prices.
He said the current discount was being funded entirely from the company’s retail margin and was not financed by the federal budget or the Federation Account.
The minister, however, warned that selling crude oil owned by the Federation below market prices would amount to a subsidy because the resulting shortfall would ultimately be borne by public revenue.
Oyedele described NNPC Retail, a wholly owned subsidiary of NNPC Limited, as a petroleum marketing company established more than 20 years ago to promote the nationwide availability, distribution and affordability of refined petroleum products.
He said the company’s mandate included moderating retail prices rather than necessarily maximising profits, adding that it had historically sold petrol at prices below those of other marketers.
The minister also dismissed concerns that the discount could reduce dividends paid to the Federation through lower profits at NNPC Limited.
According to him, a reduction in the margin earned per litre could be offset by increased sales volumes and stronger customer loyalty, potentially improving the company’s overall profitability and dividend contributions.
Oyedele further argued that the discount was unlikely to distort the petroleum market or encourage cross-border smuggling.
He said the retail margin on petrol accounted for less than five per cent of the pump price, while petrol prices in neighbouring countries were already between 20 and 40 per cent higher than in Nigeria.
Consequently, he maintained that reducing the retail margin would not significantly widen the price gap between Nigeria and its neighbours or create a new incentive for smuggling.
The minister acknowledged that high fuel prices continued to place pressure on households and businesses but said the government was pursuing other measures to ease the burden without restoring fuel subsidy.
These measures, he said, included expanding compressed natural gas (CNG) transport, waiving taxes and duties on petrol, and removing illegal levies that increase transportation costs.
Oyedele maintained that the NNPC Retail discount would lower prices for consumers without committing public funds, while potentially strengthening the company’s commercial performance.