Nigeria’s federal government has set a target ceiling of N1,350 per litre for Premium Motor Spirit, or petrol, under a proposed pricing framework intended to limit swings in domestic fuel costs without reinstating a subsidy regime.
Proposed petrol price mechanism
- Taiwo Oyedele, the Minister of Finance and Coordinating Minister of the Economy, announced the plan on Thursday at a press briefing in Abuja focused on petrol pricing and subsidy matters.
- The government plans to use what it described as price modulation, negotiating an N1,350-per-litre cap for petrol’s ex-gantry price or landing cost.
- Oyedele said the measure is designed to provide greater price stability and should not be treated either as a fuel subsidy or as formal price regulation.
- If petrol costs move above the agreed threshold, domestic refiners and fuel importers would initially take on the additional expense, with the expectation that they would recoup those losses later.
- The government also intends to introduce forward sales of crude oil to Nigerian refineries, a step aimed at reducing refiners’ exposure to international market volatility.
- By securing crude supplies in advance, the arrangement is expected to help refiners plan production more effectively and give consumers and businesses clearer visibility over future petrol prices.
