Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, has explained what the 30-day petrol discount introduced by the Nigerian National Petroleum Company Limited Retail means, insisting that it is not a return to fuel subsidy.
Oyedele made this known in a statement shared on his X platform on Friday. He said the discount was funded entirely from NNPC Retail’s profit margin and involved no public funds.
Motorists have paid less for petrol at NNPC Retail filling stations since October 1, 2026, after the company decided to reduce its retail margin.
The minister welcomed the relief the initiative offers households, commuters and transporters. He said, however, that it should not be confused with the fuel subsidy regime the Federal Government abolished in 2023.
He explained that a margin discount occurs when a retailer reduces or temporarily forgoes part or all of its profit margin to lower prices for customers. A subsidy, he said, involves the government paying part of the cost of a product from public revenue.
According to him, NNPC Retail buys petrol from the Dangote Refinery and other suppliers at market prices, then adds its retail margin to arrive at pump prices.
“The cost of the discount is borne by the retailer alone,” he said, adding that the discounted pump price remained market-reflective.
Oyedele distinguished the arrangement from selling crude oil owned by the Federation below market prices. He said that would amount to a subsidy because public revenue would bear the shortfall.
The minister also defended NNPC Retail’s decision to cut its margin. He described it as consistent with the company’s mandate to ensure the nationwide availability, distribution and affordability of refined petroleum products.
He said the company, a wholly owned subsidiary of NNPC Limited, was established more than 20 years ago as a petroleum marketing and retail business. He added that it had historically sold petrol at prices below those of other marketers.
Oyedele said the current discount was a commercial decision open to any retailer. He said it was meant to give consumers relief while supporting the company’s business.
On concerns that the reduced margin could hurt NNPC Limited’s profits and dividends to the Federation, the minister argued that higher sales volumes and customer loyalty could offset the lower earnings per litre.
He said the strategy could ultimately raise NNPC Retail’s profits and the dividends paid to the Federation, benefiting both consumers and government.
Oyedele also dismissed fears that the discount could distort the domestic fuel market or encourage smuggling into neighbouring countries.
He said the retail margin on petrol accounted for less than five per cent of the pump price. He argued that a discount within that margin was unlikely to widen significantly the price gap between Nigeria and neighbouring countries, where petrol was already 20 to 40 per cent more expensive.
The minister maintained that the initiative would not create the kind of market distortions associated with previous fuel subsidy regimes.
He said the government recognised that high fuel prices continued to weigh on households and businesses. He added that the discount was one of several measures being pursued to ease the burden.
According to him, the other measures include expanding compressed natural gas (CNG) transport, waiving taxes and duties on petrol, and removing illegal levies that raise transportation costs.
Oyedele said the measures were designed to provide relief without returning the country to a subsidy regime he described as no longer affordable.
