The Federal Government has rejected claims that a temporary petrol price reduction at NNPC stations amounts to a return of fuel subsidy, saying measure is being funded entirely from the company’s retail margin and does not involve public money.
The clarification came in a statement issued by the Federal Ministry of Finance after Ex-Vice-President Atiku Abubakar criticised the discount as a politically motivated, short-term intervention that would do little to ease Nigeria’s wider cost-of-living crisis.
According to the ministry, motorists have paid less for petrol at NNPC stations since October 1, following a reduction in the company’s retail margin.
It described the initiative as a commercial decision intended to provide relief to households, commuters and transport operators while maintaining market-based pricing.
“A margin discount and a subsidy are not the same,” the ministry said, explaining that a retailer can choose to reduce or temporarily waive part of its margin and pass the savings on to consumers.
Under such an arrangement, the ministry said, the cost is borne by the retailer rather than by the government.
The ministry contrasted that approach with a conventional fuel subsidy, under which public revenue is used to cover part of the price consumers would otherwise pay. It said the subsidy regime ended in 2023 and would not be restored.
The statement said NNPC Retail buys petrol from the Dangote Refinery and other suppliers at market prices and on commercial terms before adding a retail margin to determine the pump price.
The current discount, it added, is taken from that margin and is therefore not
funded through the federal budget or the Federation Account.
The ministry also argued that the measure is consistent with NNPC Retail’s longstanding mandate as the petroleum marketing and retail arm of NNPC Limited.
The company was established to support the availability, distribution and affordability of refined petroleum
products nationwide, and has historically sold fuel below the prices charged by some other marketers, it said.
Addressing concerns that the discount could reduce NNPC profits and, in turn, dividends to the Federation, the ministry said higher sales volumes and stronger customer loyalty could offset the lower margin per litre.
It argued that the strategy could ultimately strengthen NNPC Retail’s profits and increase dividends paid to government. The ministry further said the discount was unlikely to distort the market or encourage fuel smuggling.
It noted that retail margins account for less than five per cent of the pump price, while petrol in neighbouring countries is already 20 to 40 per cent more expensive.
On that basis, it said, the reduction would not create a significant new price gap. The government described the discount as one of several measures aimed at easing pressure on households and businesses.
Other measures cited include expanding compressed natural gas transport, waiving taxes and duties on petrol, and removing illegal levies that increase transport costs.
Atiku, however, rejected the government’s explanation. In a statement issued on October 8 by his aide the former vice- president described the proposed 30-day discount as a “panicdriven publicity stunt” and a temporary political response to growing public hardship.
Atiku argued that Nigerians should not be offered one month of cheaper fuel after years of high prices and then be expected to accept a return to the same conditions when the discount ends.
He questioned what would happen after 30-day period and said the intervention would not address high transport fares, rising food prices or the broader costof-living crisis.
He also criticised the limited scope of the measure, noting that it applies only at NNPC stations.
Atiku said the govt had not stated how much motorists would save per litre or guaranteed that any reduction in operators’ fuel costs would be passed on to passengers through lower transport fares.
The former vice-president described the policy as an admission that the hardship facing Nigerians had become impossible to ignore.
He renewed his call for capped and budgeted production support tied to fuel refined in Nigeria, with safeguards to ensure that the benefits reach consumers and support domestic refining.
The dispute highlights the continuing political and economic sensitivity of petrol pricing in Nigeria.
While the Finance Ministry says the NNPC Retail initiative is a privately borne commercial discount that avoids a return to subsidy, Atiku maintains that Nigerians need a lasting solution rather than temporary relief tied to a fixed expiry date.
