Petrol Discount: Oyedele Reveals Who Is Funding Tinubu Government’s 30-Day Plan

The Federal Government has explained that the 30-day petrol discount introduced by Nigerian National Petroleum Company Limited (NNPC) Retail could increase the company’s overall profitability despite reducing its earnings margin per litre.

Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, said the initiative was funded from NNPC Retail’s profit margin and did not involve public funds.

In a statement on Friday, Oyedele clarified that the discount should not be mistaken for the fuel subsidy regime abolished by the government in 2023.

He had earlier announced that Nigerians would benefit from lower petrol prices at NNPC filling stations for 30 days.

The minister welcomed the initiative, noting that it would offer temporary relief to households, commuters and transporters affected by fuel costs.

He explained that NNPC Retail purchases petrol from Dangote Refinery and other suppliers at market prices before adding a retail margin to determine pump prices.

According to him, the company is temporarily reducing part or all of its margin to lower prices, meaning it bears the cost of the discount itself.

Oyedele said this differs from fuel subsidy, which requires the government to use public revenue to cover part of the cost of petroleum products.

He also distinguished the arrangement from selling Federation-owned crude oil below market prices, which could create a shortfall affecting public revenue.

Defending the decision, the minister said NNPC Retail was established as a petroleum marketing and retail business and has a responsibility to support the nationwide availability and affordability of refined petroleum products.

He added that the company had historically sold petrol at prices below those of some other marketers.

On concerns that the discount might reduce NNPC Limited’s profits and dividends payable to the Federation, Oyedele argued that lower prices could attract more customers.

He explained that increased sales volumes and improved customer loyalty could help compensate for the reduced earnings per litre.

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According to the minister, if the strategy attracts sufficient additional sales, it could increase the company’s total profits and potentially raise the dividends paid to the Federation.

Such an outcome, he said, could benefit consumers through lower pump prices while also supporting government earnings.

Oyedele maintained that the initiative was a commercial decision available to retailers and did not signal a return to government-funded petrol subsidies.

He said the distinction was important in understanding how the temporary discount operates within the current market-based pricing framework.