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The Federal Government has announced plans to introduce a new price-modulation mechanism for Premium Motor Spirit (petrol), proposing a ceiling of ₦1,350 per litre on the ex-gantry or landing cost of the commodity.
The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, disclosed the policy shift on Thursday during a press briefing on petrol prices and fuel subsidy management in Abuja.
Oyedele explained that the framework aims to protect consumers from international market shocks while maintaining deregulation principles, clarifying that the intervention is neither a price control measure nor a return to government fuel subsidies.
Elaborating on the framework during the briefing, Oyedele said: “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.”
“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.”
Under the proposed structure, domestic refineries and fuel importers will temporarily absorb operational costs exceeding the ₦1,350 threshold during periods of global price spikes, with mechanisms in place to recoup the differential when market conditions stabilize.
To further insulate domestic pump prices, the Minister also outlined a strategic forward-sale policy for crude oil allocations to local refiners.
Addressing the long-term sustainability of the crude sale agreement, Oyedele stated:“As production rises and previously committed crude is freed up, these will shield pump prices from volatility in the global markets.”
“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.”
The forward-contract approach is expected to provide financial certainty for local refiners, allowing them to stabilize production costs and prevent sharp fluctuations at retail filling stations across Nigeria.
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