Finance Minister Taiwo Oyedele has said the Nigerian National Petroleum Company (NNPC) Retail Limited’s petrol discount is not expected to reduce dividend payments to the Federation Account, arguing that increased sales could offset lower profit margins.
Oyedele made the clarification in a statement issued by the Federal Ministry of Finance on Friday, describing the initiative, which began on October 1, 2026, as a commercial decision funded by the retailer rather than public revenue.
He said NNPC Retail was reducing or temporarily foregoing part of its retail margin to lower prices for consumers, adding that higher sales volumes and stronger customer loyalty could help compensate for the reduced earnings per litre.
“A smaller margin or temporary zero margin on each litre can be more than offset by selling more litres over time,” Oyedele said.
He added that the initiative could improve the company’s market position and, over time, support its profitability and dividends to the Federation.
The minister stressed that the discount did not amount to a return to the petrol subsidy regime abolished in May 2023. He explained that subsidies involve government revenue covering part of fuel costs, whereas the current initiative requires the retailer to accept a lower margin.
“The cost of the discount is borne by the retailer alone,” he said.
According to Oyedele, NNPC Retail buys petrol from the Dangote Refinery and other suppliers at market prices before adding its retail margin. He said the discount was not financed through the Federal Government’s budget or the Federation Account.
He distinguished the arrangement from selling federally owned crude oil below market prices, which he said would create a shortfall ultimately borne by public revenue.
Oyedele also rejected concerns that the discount would significantly distort the downstream market or encourage cross-border smuggling. He said retail margins account for less than five per cent of petrol’s pump price, while prices in neighbouring countries are already 20 to 40 per cent higher than in Nigeria.
The minister described the initiative as part of broader efforts to ease the effects of high fuel prices on households and businesses. Other measures include expanding compressed natural gas (CNG) transportation, waiving taxes and duties on petrol, and removing illegal levies that raise transport and logistics costs.
NNPC Retail’s actual earnings and dividend contributions during the discount period will depend on sales volumes, operating costs and whether increased patronage offsets the reduction in margins.
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