The Federal Government has said the petrol discount introduced by the Nigerian National Petroleum Company Limited’s retail arm is not a return of fuel subsidy, insisting that no public funds are being used to reduce prices at its filling stations.

The government said the discount was funded by NNPC Retail Limited’s decision to reduce its retail profit margin, rather than through payments from the federal budget or the Federation Account.

Finance Minister and Coordinating Minister of the Economy, Taiwo Oyedele, said this in a statement issued on Friday, October 9, 2026, titled, “The NNPC Retail Discount Is Not a Subsidy: No Public Money Is Involved.” clarifying the funding of the petrol discount introduced at NNPC Retail stations on October 1.

The clarification followed an earlier announcement by the Presidency that NNPC Retail would forgo its retail profit margin on petrol and sell at cost as part of measures to cushion households against global oil-price shocks.

He said the discount comes from that margin alone, with the company absorbing the reduction rather than relying on government funding.

“A margin discount means the retailer chooses to take a smaller margin, or no margin at all for a period, and passes the saving to the customer,” Oyedele said.

He distinguished the arrangement from a fuel subsidy, explaining that a subsidy involves government using public revenue to cover part of the price paid by consumers.

“A subsidy is different. It is when government pays part of the price the consumer would otherwise pay,” he said.

The administration ended the previous fuel subsidy regime in 2023, and Oyedele maintained that the current discount does not represent a reversal of that policy.

The minister also said the discount could benefit NNPC Retail commercially by encouraging motorists to buy more fuel from its stations and strengthening customer loyalty.

He said increased sales volumes could offset the lower earnings on individual litres and potentially support the company’s profits and dividend payments to the Federation.

According to Oyedele, NNPC Retail’s role includes ensuring the nationwide availability of petroleum products and helping moderate retail prices.

NNPC Retail Limited, a wholly owned subsidiary of NNPC Limited, began operating more than two decades ago as a petroleum marketing and retail company.

The minister also argued that the reduction was unlikely to create significant market distortions or encourage petrol smuggling across Nigeria’s borders.

“The retail margin on petrol is less than 5 percent of the pump price,” he said, adding that petrol prices in neighbouring countries were already between 20 and 40 per cent higher than those in Nigeria.

The Federal Government acknowledged that fuel prices continue to place pressure on households and businesses. Oyedele said other measures to ease the burden include expanding compressed natural gas (CNG) transport, waiving taxes and duties on petrol, and removing illegal levies that increase transport costs.

He said the measures were intended to provide relief to consumers without returning the country to a fuel subsidy system.