Tinubu Administration Sets Petrol Price Ceiling at ₦1,350

The Tinubu administration's reform initiatives focus on distinguishing between the removal of an unsustainable subsidy and the establishment of a competitive, efficient downstream petroleum market in Nigeria. Finance Minister Taiwo Oyedele's press briefing on "Fuel Prices and the Subsidy Question" proposed a ceiling of ₦1,350 per litre on the ex-gantry or landing cost of petrol.

This arrangement requires refiners and importers to absorb costs exceeding this ceiling, with the possibility of offsetting losses when prices decrease. The government prefers to label this as "price smoothing" rather than "subsidy" or "price control." Key questions arise regarding the regulatory mechanism for determining eligible costs, interest on deferred amounts, and the implications for suppliers if international costs remain high.

The briefing also raises concerns about the participation of various suppliers, including the Nigerian National Petroleum Company Limited (NNPCL), and the potential for a quasi-subsidy if price recovery is delayed.