The Presidency has dismissed the possibility of reinstating petrol subsidy, maintaining that the Federal Government’s temporary fuel discount at Nigerian National Petroleum Company Limited (NNPC) retail outlets is intended to provide short-term relief without reversing the subsidy removal policy introduced in 2023.
Bayo Onanuga, Special Adviser to President Bola Tinubu on Information and Strategy, clarified the government’s position while responding to criticism from the African Democratic Congress (ADC) and the Nigeria Democratic Congress (NDC).
In a post on X, Onanuga urged the opposition parties to review an explanation by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, on the distinction between a retailer voluntarily reducing its profit margin and the government using public funds to subsidise petrol prices.
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“The ADC and NDC should carefully re-read this ministerial brief: Margin Discount and a Subsidy Are Not the Same,” Onanuga wrote.
He explained that fuel retailers generally include a profit margin in their selling prices. Under a margin discount arrangement, a retailer may choose to reduce or temporarily surrender some or all of that margin, allowing customers to benefit from lower prices.
According to the presidential spokesman, the retailer absorbs the cost of the reduction rather than the government paying the difference from public revenue.
“Every marketer adds a margin to the price it pays for the fuel it sells. 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. The cost of the discount is borne by the retailer alone,” he stated.
Onanuga said the arrangement differs from the petrol subsidy system discontinued by the Tinubu administration in May 2023.
He explained that a subsidy occurs when the government pays part of the cost of a product on behalf of consumers, using public funds that could otherwise support public services, infrastructure and other government responsibilities.
“A subsidy is different. It is when government pays part of the price the consumer would otherwise pay. That money comes from public revenue — funds that would otherwise go to salaries, schools, hospitals and infrastructure,” he said.
Reaffirming the administration’s position, Onanuga added: “That is the regime this administration ended in 2023, and it is not coming back.”
ADC, NDC Criticise Government’s Petrol Discount
The Presidency’s response followed objections from the ADC and NDC, which questioned whether the temporary discount would provide meaningful relief to Nigerians facing rising petrol prices and increasing living costs.
The ADC described the initiative as an inadequate response to the economic difficulties associated with the removal of petrol subsidy. The NDC also challenged the effectiveness of the arrangement and questioned the government’s broader approach to cushioning the impact of higher fuel prices.
The ADC Presidential Campaign Council, through its Director of Media and Publicity, Kola Ologbondiyan, and Strategic Communications Director, Phrank Shaibu, reportedly criticised the proposed N1,350-per-litre arrangement.
The campaign council described the initiative as a “desperate, shameless, and insulting attempt to bribe Nigerians” ahead of the 2027 general elections.
Former Vice President Atiku Abubakar, the ADC’s presidential candidate, also faulted the policy, describing the 30-day discount as a “panic-driven publicity stunt.”
Atiku argued that a temporary reduction in petrol prices would not adequately address the economic hardship Nigerians had experienced over the preceding three years. He also questioned the administration’s economic direction, arguing that short-term interventions could not replace sustainable policies capable of improving living conditions.
The opposition party further raised concerns about what it described as inconsistent communication by government officials, insisting that Nigerians needed clear and lasting measures to address rising costs.
The NDC also rejected the discount, describing it as “tokenism and a Greek gift.”
Its National Publicity Secretary, Osa Director, questioned why the government was introducing temporary relief after removing petrol subsidy without providing sufficient support to cushion the impact on households and businesses.
The party also expressed concern about the practical implementation of the initiative. It argued that directing motorists to selected NNPC retail stations could result in long queues, traffic congestion and potential safety risks around filling stations.
The NDC maintained that the discount would not resolve Nigeria’s wider economic problems and called on Nigerians to seek political change ahead of the 2027 elections. The party has identified Peter Obi as its preferred presidential candidate.
NNPC Extends Petrol Discount to October 31
Despite the opposition’s criticism, the Presidency has maintained that the initiative is designed to ease the immediate pressure of higher petrol prices without reversing the government’s decision to deregulate the downstream petroleum sector.
NNPC Limited has announced that its petrol discount, introduced on October 1 to mark Nigeria’s 66th Independence Anniversary, will run until October 31.
In a statement issued on Friday, October 9, and signed by its Chief Corporate Communications Officer, Andy Odeh, the company said the initiative was intended to offer direct relief to households, businesses and other consumers affected by rising fuel costs.
NNPC attributed part of the pressure on domestic petrol prices to elevated international crude oil prices amid the conflict in the Middle East.
The company clarified that the discount applies to its participating retail outlets and does not establish a uniform pump price across Nigeria. It also stressed that the initiative would not replace the market-based pricing framework for petroleum products.
“This discount is a customer relief initiative and does not represent the reintroduction of petroleum subsidy,” NNPC stated.
The clarification followed an announcement by Oyedele that NNPC Retail would temporarily forgo its retail profit margin and sell petrol at cost for an initial period of 30 days, with priority given to public transport operators.
Oyedele said the arrangement was intended to reduce the immediate impact of global oil market volatility on Nigerian households and businesses.
“We are offering a discount on petrol dispensed by NNPC Limited for the next 30 days in the first instance with priority for public transporters nationwide. So, it’s not a subsidy, government is just saying we sell to you at cost,” the minister said.
FG Proposes N1,350 Per-Litre Cost Ceiling
Beyond the temporary discount, the Federal Government has disclosed plans to negotiate a proposed ceiling of N1,350 per litre on the ex-gantry or landing cost of petrol as part of efforts to moderate sudden price increases.
Under the proposal, refiners and importers would initially absorb any difference if their actual costs exceeded the agreed ceiling. They could potentially recover the shortfall later when crude oil prices or exchange rates became more favourable.
Oyedele maintained that the arrangement was intended to smooth out price fluctuations over time rather than introduce a new subsidy or impose fixed pump prices.
“This is neither a subsidy nor a price control: it is designed to smooth prices over time rather than suppress them,” he said.
The proposal would require an agreed mechanism for handling cost differences and subsequent recovery. Its practical effect would therefore depend on the final terms negotiated with refiners and importers, as well as how the arrangement is implemented.
Other Measures Planned to Cushion Economic Pressure
The Federal Government has also outlined additional measures aimed at reducing the financial burden on households and businesses.
These include facilitating forward sales of crude oil to domestic refineries, increasing funding for cash transfers to vulnerable households, expanding access to subsidised credit for small businesses and consumers, and accelerating the adoption of compressed natural gas (CNG) for transportation.
Other proposals under consideration include reducing road taxes and levies that contribute to transportation costs, introducing an excess-profit tax for operators found to be taking undue advantage of consumers, and providing additional tax relief for low-income earners through the proposed 2027 Finance Bill.
The government has also announced plans to establish a National Strategic Fuel Reserve to strengthen Nigeria’s ability to respond to future energy supply disruptions, artificial scarcity and sudden price increases.
The debate over the NNPC discount highlights the difference between the government’s stated objective of providing temporary relief and the opposition’s demand for broader, more sustainable economic interventions.
While the Presidency insists that the arrangement does not amount to a return to petrol subsidy, its overall impact will depend on the level of savings passed on to consumers, the availability of discounted fuel at participating stations and the effectiveness of the government’s wider measures to address rising living costs.
