Fuel Subsidy Has Not Returned, NNPC Discount Funded by Retail Margin — FG
The Federal Government has dismissed claims that the recent reduction in petrol prices at NNPC Retail filling stations represents a return of fuel subsidy, insisting that no public funds are being used to finance the discount.
Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, said the price reduction was made possible by NNPC Retail’s decision to cut its retail margin rather than rely on government funding.
Oyedele made the clarification in a press release issued by the Federal Ministry of Finance in Abuja on Friday, October 9, 2026.
According to the minister, the discount, which took effect on October 1, is intended to provide relief to motorists, commuters, transport operators and other consumers struggling with high fuel prices.
He explained that the discount should not be confused with fuel subsidy, under which the government pays part of the cost of petroleum products using public revenue.
The minister said NNPC Retail buys petrol from the Dangote Refinery and other suppliers at prevailing market prices and subsequently determines its pump prices by adding a retail margin.
He stated that the current discount comes entirely from that margin and does not involve funding from the federal budget or the Federation Account.
Oyedele further explained that NNPC Retail was established to ensure the nationwide availability and distribution of petroleum products while helping to moderate prices.
He said the company’s role was not necessarily to maximise profit on every litre sold, noting that the current discount was a commercial decision available to other retailers as well.
The minister also dismissed concerns that reducing the retail margin would automatically lead to lower profits for NNPC Limited and reduced dividends to the Federation.
According to him, increased sales volumes and stronger customer loyalty could offset the reduction in earnings per litre and potentially improve the company’s overall profitability.
He added that the discount was unlikely to encourage cross-border fuel smuggling because the retail margin represents less than five per cent of the pump price.
Oyedele said the reduction would not significantly increase the price gap between Nigeria and neighbouring countries, where petrol prices are estimated to be 20 to 40 per cent higher.
The minister acknowledged the continuing impact of fuel prices on Nigerians but said the government was implementing other measures to reduce transportation costs.
He listed the expansion of CNG-powered transport, the waiver of taxes and duties on petrol, and the removal of illegal levies among the measures being pursued.
Oyedele maintained that the objective was to ease the financial burden on Nigerians without reintroducing the fuel subsidy system that the administration ended in 2023.
