The Federal Government is deploying tax relief, transport support and targeted fuel-price measures to cushion households and businesses from rising petrol costs, while rejecting calls to restore the fuel subsidy regime.
Finance Minister and Coordinating Minister of the Economy, Taiwo Oyedele, said the government would prioritise public transporters under its petrol discount programme through NNPC retail stations.
The government is also negotiating a mechanism under which refiners and importers would absorb temporary increases in petrol costs and recover the difference when market conditions improve.
The proposed N1,350 per litre threshold applies to the ex-gantry or landing cost of petrol, rather than the final pump price. The government plans to review the figure monthly and publish the calculations as part of efforts to moderate sharp price swings.
“This is neither a subsidy nor a price control: it is designed to smooth prices over time rather than suppressing them,” Oyedele said at a press briefing in Abuja.
The government will also increase funding for cash transfers to vulnerable households and provide subsidised credit to small businesses and consumers.
It plans to accelerate the deployment of compressed natural gas vehicles, while urging transport operators to pass lower fuel costs on to passengers through reduced fares.
The Federal Government is also moving to remove illegal road levies that add to transportation and logistics costs, while considering an excess-profit tax on energy operators deemed to be taking undue advantage of consumers.
Proceeds from the proposed tax would be dedicated to cushioning the impact of higher fuel prices through transport support or vouchers for vulnerable urban minimum-wage earners.
Oyedele said the government would work with the National Assembly on enhanced tax relief for low-income earners under the 2027 Finance Bill.
The measures come as petrol prices rise following an increase in global crude oil and refined-product costs. Brent crude is trading above $100 per barrel, while disruptions to shipping through the Strait of Hormuz have reduced the flow of oil and refined products from the Middle East.
According to Oyedele, Nigeria’s petrol price has risen to an average of about N1,400 per litre from around N830 before the latest global oil-market shock.
The government also plans to introduce forward crude sales to domestic refineries as production increases. The arrangement is expected to provide local refiners with greater certainty over crude supplies and reduce their exposure to volatility in international markets.
It is further developing a National Strategic Fuel Reserve that would allow refined products to be released into the market when global disruptions or hoarding threaten supply and price stability.
Oyedele said the government had already provided relief through tax and duty waivers on petroleum products, which he estimated were saving consumers between N400 and N600 per litre.
He said the measures represented more than N5 trillion in potential tax revenue forgone by the government.
The government has rejected calls for a return to the petrol subsidy, warning that the fiscal cost would outweigh the short-term relief it provides.
“To return petrol to its pre-reform price would cost more than N20 trillion a year, before any allowance for inflated consumption and smuggling,” Oyedele said.
He added that a N500 per litre subsidy would cost more than N16 trillion annually, an amount close to the total Federation Account allocation shared by Nigeria’s three tiers of government in 2025.
Oyedele said the removal of the subsidy released N15.8 trillion to the Federation Account between June 2023 and December 2025, with N10.4 trillion going to state and local governments.
He warned that restoring the subsidy could weaken the naira, increase borrowing costs and undermine recent economic gains.
“A subsidy does not lower the cost of fuel. It only changes how it is paid, and when,” Oyedele said.