Nigeria reduces fuel prices for 30 days and studies maximum ceiling

O nigerian finance minister announced today that it will reduce fuel prices for 30 days and set a ceiling within a set of measures to accommodate the impact of energy shocks.

“ We are offering a discount on gasoline distributed by NNPC [the state oil company] over the next 30 days, in a first phase, giving priority to national public transport,” said Taiwo Oyedele.

In the press statements quoted by the French news agency, France-Presse (AFP), the minister assured that “it is not a subsidy” and explained that “the government merely says it sells at the cost price”, but did not specify the price.

Nigeria is the largest oil producer in Africa and houses the largest refinery in the continent, owned by the richest man in Africa, Aliko Dangote, but authorities do not control fuel prices, which have risen to about 1,400 nairas (€0.93) per litre, against 830 nairas (€0.55) before the Middle East war.

The Minister of Finance, Taiwo Oyedele, explained that the measures aimed to relieve pressure on families and businesses while avoiding a return to fuel subsidies — a highly sensitive subject to only three months of general elections and a measure that has been discouraged by international economic institutions such as the International Monetary Fund.

President Bola Tinubu, who re-applied for elections on 16 January, launched extensive economic reforms when he took power in 2023, including the elimination of an important fuel subsidy and the fluctuation of Nigerian currency, the naira.

These measures, largely supported by economists, have led to an increase in the cost of living and have exacerbated the difficulties in the most populous country in Africa, which has suffered a deterioration of the economic and social situation since the beginning of the year due to the war of the United States and Israel against Iran.

In the statements quoted by AFP, the governor also said that a “price modulation” will be introduced to mitigate price volatility in petrol pumps.

“ Prices in petrol pumps should not follow every fluctuation of world crude oil or exchange rates,” Oyedele said, adding that the government was “trading a maximum of 1 350 nairas (0.90 euros) per litre.”.

Nigerians are expected to go to the polls on 16 January, when President Tinubu will face his main rivals of 2023, Peter Obi and Atiku Abubakar, who promised to restore gas subsidies during his election campaign.