By Nana Musa
The Federal Government has rejected calls to restore fuel subsidy, saying such a move could worsen prices and destabilise the economy.
The Minister of Finance and Coordinating Minister of the Economy, Mr Taiwo Oyedele, said this at a High Level Strategic Engagement with Ministries, Departments and Agencies (MDAs) in Abuja on Abuja.
Oyedele said that the recent rise in petrol prices was largely driven by the global conflict and disruptions in international energy supplies.
He said that Brent crude had risen above 100 dollars per barrel, while shipping through the Strait of Hormuz had fallen sharply.
According to him, petrol prices rose from about N830 to N1,400 per litre following the global energy shock.
Oyedele said that returning to subsidy would transfer the burden to government finances and potentially threaten salaries, pensions and public services.
He estimated that restoring petrol to its pre-reform price could cost more than N20 trillion annually.
The minister said that even fixing petrol at N500 per litre would cost the government over N16 trillion annually.
Oyedele said that subsidy removal released N15.8 trillion to the Federation Account between June 2023 and December 2025.
He said that N10.4 trillion of the amount went to state and local governments, improving their ability to meet financial obligations.
Oyedele said that the government had granted tax and duty waivers on petroleum products, saving consumers between N400 and N600 per litre.
He said the waivers represented more than N5 trillion in potential tax revenue, while petrol remained cheaper than in several African countries.
The minister said that the government was also promoting local refining, Naira-for-crude transactions and compressed natural gas as alternatives.
He said that more than 120,000 vehicles now ran on CNG, supported by over 400 conversion centres and 96 refuelling stations.
According to him, more than 550 CNG buses have been deployed, with fares falling by 30 per cent to 50 per cent where they operate.
He announced a 30-day margin discount on petrol sold at NNPC stations, prioritising public transport operators nationwide.
The minister also disclosed plans to negotiate a N1,350 per litre ceiling on petrol ex-gantry or landing costs.
He said that the ceiling would be reviewed monthly to reduce price volatility without reintroducing fuel subsidy or imposing permanent price controls.
Oyedele said that government would also increase cash transfers, subsidised credit and accelerate CNG deployment to support vulnerable Nigerians.
He announced plans to consider an excess profit tax on energy operators taking undue advantage of consumers.
“Proceeds will support transport assistance or vouchers for vulnerable urban minimum-wage earners,” he said.
The minister also announced plans for a National Strategic Fuel Reserve to protect consumers against future supply disruptions.
He said that the reserve would release refined products during major disruptions or hoarding, without fixing market prices.
He said government was also working with states to eliminate illegal levies contributing to higher transport and logistics costs.
The minister assured Nigerians that the government was developing comprehensive fiscal measures aimed at reducing inflation to single digits sustainably.
“We can not afford to live through the previous cycle of scarcity, smuggling, currency weakness and fiscal crisis,” he said.
Oyedele said that government’s priority was to preserve economic reforms while ensuring their benefits reached Nigerians more quickly and tangibly. (NAN)
Edited by Kadiri Abdulrahman
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