The Presidency has ruled out the possibility of restoring petrol subsidy, insisting that the Federal Government’s 30-day petrol discount at Nigerian National Petroleum Company Limited (NNPC) retail stations is a temporary relief measure and not a return to government-funded fuel subsidies.
Bayo Onanuga, Special Adviser to President Bola Tinubu on Information and Strategy, made the position clear while responding to criticisms of the policy by the African Democratic Congress (ADC) and the Nigeria Democratic Congress (NDC).
In a post on X, Onanuga urged both opposition parties to study the explanation provided by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, on the difference between a retailer reducing its profit margin and the government paying part of the cost of petrol.
“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 petroleum marketers usually add a profit margin to the price at which they sell fuel and that a margin discount occurs when a retailer agrees to reduce or completely forgo that profit for a specified period.
According to him, the retailer bears the cost of the discount rather than the government using public funds to reduce the price paid by consumers.
“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.
The presidential spokesman contrasted the arrangement with the petrol subsidy system abolished by the Tinubu administration in May 2023.
He explained that a subsidy involves the government paying part of the cost of a product on behalf of consumers, using money that could otherwise be spent on public services and infrastructure.
“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,” Onanuga said.
He added, “That is the regime this administration ended in 2023, and it is not coming back.”
The Presidency’s response followed strong criticism from the ADC and NDC, which rejected the Federal Government’s decision to offer a temporary petrol discount through NNPC Retail outlets amid rising fuel prices.
The ADC described the initiative as an inadequate response to the economic difficulties Nigerians have faced since the removal of petrol subsidy, while the NDC questioned its effectiveness and the government’s approach to providing relief.
The ADC Presidential Campaign Council, through its Director of Media and Publicity, Kola Ologbondiyan, and Strategic Communications Director, Phrank Shaibu, reportedly described the proposed N1,350-per-litre arrangement 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 criticised the policy, describing the 30-day discount as a “panic-driven publicity stunt.”
Atiku argued that a temporary reduction would not adequately address the economic hardship Nigerians had experienced over the past three years. He also questioned the government’s economic direction, accusing the administration of relying on short-term measures instead of introducing sustainable solutions.
The opposition party further criticised what it described as inconsistent communication from government officials, arguing that Nigerians needed clear and lasting policies to address rising living costs.
The NDC also condemned the discount, describing it as “tokenism and a Greek gift.”
The party, through its National Publicity Secretary, Osa Director, questioned why the government was offering temporary relief after removing petrol subsidy without providing sufficient support to cushion the effects on citizens.
It also raised concerns about the practical implementation of the arrangement, arguing that directing motorists to a limited number of NNPC retail stations could lead to long queues, congestion and possible safety risks at filling stations.
The NDC maintained that the discount would not provide a lasting solution to the country’s economic challenges and urged Nigerians to seek political change ahead of the 2027 elections. The party has presented its presidential candidate, Peter Obi, as its preferred alternative.
Despite the criticism, the Presidency has maintained that the arrangement is intended to reduce the immediate burden of higher petrol prices without reversing the government’s decision to deregulate the downstream petroleum sector.
Meanwhile, NNPC has announced that its discount, initially introduced on October 1 to commemorate Nigeria’s 66th Independence Anniversary, would continue 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 designed to provide direct relief to households, businesses and other customers affected by rising fuel prices.
NNPC attributed the pressure on domestic petrol prices partly to elevated global crude oil prices resulting from the conflict in the Middle East.
The company stressed that the discount applied to its retail outlets and would neither establish a uniform national pump price nor change 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 forgo its retail profit margin and sell petrol at cost for an initial period of 30 days, with priority given to public transport operators.
The minister explained that the arrangement was intended to cushion the effect 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,” Oyedele said.
The Federal Government also disclosed plans to negotiate a proposed ceiling of N1,350 per litre on the ex-gantry or landing cost of petrol to reduce sudden price increases.
Under the proposal, refiners and importers would initially bear any difference if the actual cost exceeded the ceiling, with the possibility of recovering the shortfall later when crude oil prices or exchange rates became more favourable.
Oyedele insisted that the arrangement would help moderate price fluctuations rather than introduce a subsidy or impose fixed prices.
“This is neither a subsidy nor a price control: it is designed to smooth prices over time rather than suppress them,” he said.
Other measures announced by the government include facilitating forward sales of crude oil to domestic refineries, increasing funding for cash transfers to vulnerable households, expanding subsidised credit for small businesses and consumers, and accelerating the rollout of compressed natural gas for transportation.
The government is also considering measures to reduce road taxes and levies that increase transportation costs, an excess profit tax for operators found to be taking undue advantage of consumers, and additional tax relief for low-income earners under the proposed 2027 Finance Bill.
It also plans to establish a National Strategic Fuel Reserve to help protect the country against future energy supply disruptions, artificial scarcity and sudden price increases.
CIURTESY: PoliticsNigeria
