FG Targets ₦1,350/Litre Ceiling On Petrol Cost To Stabilise Pump Prices

The Federal Government says it is targeting a ₦1,350-per-litre ceiling on the ex-gantry or landing cost of petrol as part of measures to cushion the impact of high fuel prices on Nigerians and stabilise pump prices.

The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, disclosed this on Thursday at a briefing on fuel prices and subsidy questions in Abuja.

Oyedele said the government was taking further steps because existing measures had not fully addressed the pressure on households and businesses following increases in fuel and transportation costs.

Under the proposed price modulation mechanism, the government is negotiating a ₦1,350-per-litre ceiling on the ex-gantry or landing cost of petrol, subject to monthly reviews.

The proposed ceiling does not mean petrol will sell for ₦1,350 per litre at filling stations but is rather intended to prevent sharp movements in global crude prices or the exchange rate from immediately translating into corresponding increases in the cost of petrol.

“Pump prices should not have to follow every swing in global crude or the exchange rate. The government is negotiating a ceiling of ₦1,350 a litre on the ex-gantry or landing cost of petrol to keep pump prices stable,” Oyedele said.

He added that where the cost rises above the ceiling, refiners and importers would initially bear the shortfall and recover it later when market conditions allow.

Oyedele said the arrangement was neither a subsidy nor price control, but a mechanism designed to smooth out petrol prices over time.

“The reasoning is simple: ₦1,400 a litre today and ₦1,400 a litre tomorrow is better than ₦1,500 a litre today and ₦1,300 a litre tomorrow,” he said. “Why? Because volatility itself adds to uncertainty and cost, and when fuel goes up sharply, they rarely come down as fast.”

He said the ceiling would be reviewed monthly, with the figures published for transparency.

As part of the wider measures, the government also plans to offer a temporary margin discount on petrol dispensed by the Nigerian National Petroleum Company Limited for an initial 30 days, with priority given to public transporters nationwide.

The minister stressed that the discount was not a return to fuel subsidy, but an arrangement to sell the product at cost.

The government is also exploring forward sales of crude oil to local refiners as domestic production increases, allowing committed crude supplies to be freed up and helping shield pump prices from global market swings.

Other measures include working with state authorities to eliminate illegal levies and road-use charges that add to transportation costs, increasing funding for cash transfers to vulnerable households and providing more direct credit support for small businesses.

The government also plans to accelerate the rollout of compressed natural gas for transport operators, with the expectation that operators would pass the resulting savings on to commuters.

Oyedele said sanctions could be applied against operators who exploit consumers, while proceeds from enforcement actions would be channelled into transport support.

The government is also considering an excess profits tax and targeted vouchers for low-income earners, alongside measures to reduce regulatory costs and red tape that drive up the prices of goods and services.

It further plans to establish a national strategic fuel reserve to strengthen supply security and guard against disruptions or hoarding, while improving traffic management and logistics to reduce fuel consumption.

Oyedele said the government would also leverage NIPOST address codes to help lower logistics costs.

He said the measures would be scaled up in collaboration with state governments, stressing that the objective was to ensure assistance reaches those who need it most without creating additional pressure on the wider economy.