FG sets N1,350 ceiling for petrol landing cost

The Federal Government has announced a N1,350 per litre ceiling on the ex-gantry or landing cost of Premium Motor Spirit, popularly known as petrol.

The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, disclosed this on Thursday during a press briefing on petrol prices and subsidy-related issues in Abuja.

Oyedele said the arrangement was aimed at keeping petrol prices stable, stressing that it was neither a subsidy nor a form of price control.

He said the government was introducing a price modulation mechanism under which the cost of petrol at the ex-gantry or landing point would be capped at N1,350 per litre.

Price modulation

Explaining the arrangement, Oyedele said refineries and importers would absorb any cost above the agreed ceiling and recover the difference later.

“We are introducing price modulation. The government is negotiating a ceiling of N1,350 per litre on the ex-gantry or landing cost of petrol to keep the price stable.

“When costs rise above the ceiling, refineries and importers will carry the shortfall and recover it later. This is neither a subsidy nor price control,” he said.

The minister said the mechanism was intended to shield petrol prices from sharp fluctuations in the international market while providing greater certainty for operators in the downstream petroleum sector.

He said the arrangement would allow refineries and importers to plan their operations despite changes in market conditions.

Forward crude sales planned

Oyedele also announced plans for the forward sale of crude oil to domestic refineries as part of measures to reduce the impact of volatility in international crude prices.

According to him, the arrangement would give local refiners greater certainty over crude supply and enable them to plan their operations more effectively.

The government expects the measure to contribute to greater stability in petrol prices by reducing the exposure of domestic refiners to sudden changes in the international oil market.

The announcement comes amid renewed debate over petrol prices and calls for measures to cushion the impact of fuel costs on Nigerians.

Oyedele maintained that the proposed price modulation arrangement should not be interpreted as a return to the petrol subsidy regime, insisting that the government was seeking a mechanism that would provide price stability without directly subsidising the commodity.