FG Plans ₦1,350 Petrol Cost Ceiling to Reduce Pump Price Shocks

The Federal Government says it is negotiating a ceiling of ₦1,350 per litre on the landing or ex-gantry cost of petrol as part of measures to reduce sudden price increases and protect consumers from market volatility.

Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, announced the plan on Thursday during a press briefing in Abuja on fuel prices and the debate over petrol subsidy.

Oyedele said the proposed arrangement would help moderate the effect of changes in global crude oil prices and foreign-exchange rates on petrol costs.

He explained that the government was considering a price-modulation mechanism under which petrol prices would not have to reflect every short-term movement in crude prices or the exchange rate.

Under the proposal, when the cost of petrol rises above the agreed ceiling, refiners and importers would carry the difference temporarily and recover it later when market conditions improve, according to the minister’s explanation.

The government’s proposal concerns the landing or ex-gantry cost of petrol, rather than a guaranteed retail pump price of ₦1,350 at every filling station.

The final price paid by consumers may also be affected by other costs and the operation of the proposed mechanism. The government has not described the ceiling as a confirmed nationwide pump-price cap.

The plan comes amid rising fuel costs and growing demands from workers and consumers for relief from the effects of higher petrol prices on transport fares, food and other essentials.

Oyedele also warned that restoring a blanket petrol subsidy could put pressure on public finances, potentially weakening the naira and raising the cost of borrowing. He projected that subsidy restoration could push petrol prices to at least ₦2,000 per litre and the exchange rate towards ₦3,000 to the dollar within months. Those figures were presented as the government’s projections, not as current prices or guaranteed outcomes.

As a separate measure, the government announced that NNPC would sell petrol at cost for an initial 30-day period by forgoing its retail profit margin, with priority for public transport operators.

The government said the measures were intended to provide some immediate relief while avoiding a return to the former blanket subsidy system.

The proposed cost ceiling and price-modulation arrangement will depend on the final terms and implementation framework. Until those details are confirmed, the plan should be regarded as a government proposal rather than an established nationwide pricing rule.