FG Announces ₦1,350/Litre Petrol Price Ceiling Under New Modulation Scheme
- Finance Minister Taiwo Oyedele announced a new petrol price-modulation mechanism during a press briefing in Abuja on Thursday
- The Federal Government is negotiating a ₦1,350 per litre ceiling on the ex-gantry or landing cost of petrol to keep pump prices stable
- Refineries and importers would absorb costs above the ceiling under the plan, which Oyedele said is neither a subsidy nor price control
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The Federal Government has announced plans to introduce a price-modulation framework for petrol, with a proposed ceiling of ₦1,350 per litre placed on the ex-gantry or landing cost of the commodity.
Finance Minister and Coordinating Minister of the Economy, Taiwo Oyedele, made the disclosure on Thursday during a press briefing on petrol prices and subsidy-related matters in Abuja.
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Oyedele said the mechanism was designed to shield consumers from price swings, while making clear that it does not amount to a subsidy or price control.
"We are introducing price modulation. The government is negotiating a ceiling of ₦1,350 per litre on the ex-gantry or landing cost of petrol to keep the price stable," he said.
"When costs rise above the ceiling, refineries and importers will carry the shortfall and recover it later. This is neither a subsidy nor price control," Oyedele added.
How the new arrangement would work
Under the proposed scheme, local refineries and importers would be required to absorb any costs that exceed the agreed ceiling, with the opportunity to recoup those expenses at a later date. The arrangement is intended to provide price stability at the pump without placing the burden of direct government funding on the scheme.
The minister also unveiled plans to offer domestic refineries forward sales of crude oil, a move he said would protect fuel prices from fluctuations in the global oil market.
"As production rises and previously committed crude is freed up, these will shield pump prices from volatility in the global markets," Oyedele said.
He explained that the forward-sale model would allow refineries to plan operations with greater cost certainty, with the government locking in crude prices over defined periods.
"So the idea we have is an idea that is sustainable. You can sell your crude forward. We say to the refiners, for the next six months, we are selling you crude at $80 per barrel, for example. That preserves your budgets, provides certainty to the refiners and price stability to the consumer," he said.
Why the government is acting
The briefing came against the backdrop of continued public concern over the cost of petrol following the removal of fuel subsidy, which sent prices sharply higher across Nigeria.
The proposed modulation mechanism represents the government's latest attempt to manage pump prices without returning to full-blown subsidy spending.
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NNPC reduces petrol price, announces new rates
Legit.ng earlier reported that the Nigerian National Petroleum Company Limited (NNPCL) has reduced the pump price of petrol by N5 per litre at its retail outlets in Lagos from N1,360 to N1,355. Motorists in Lagos and Rivers now pay N1,355 per litre, making them the cheapest locations on NNPC's updated price list. Abuja buyers are paying N1,370 per litre under the new arrangement.
Source: Legit.ng
