The Independent Media and Policy Initiative (IMPI) has defended the newly-introduced 30-day petrol retail discount and forward crude-sale arrangement by the Federal Government as a deliberate shock absorber against global price volatility rather than a backdoor reintroduction of fuel subsidies.
It also simultaneously faulted the subsidy restoration push by former Vice President and Presidential candidate of the African Democratic Congress ADC, Alhaji Atiku Abubakar as a threat to Nigeria’s current economic momentum.
IMPI, in a policy statement signed by its Chairman Dr Omoniyi Akinsiju, described the government policy as a time-bound intervention similar to Germany’s 90-day, 17 cent fuel discount model which the former Vice President had commended.
“The policy thrust is clear enough; it is not a 30-day ‘expiration date’ but, rather, a controlled trial period,” the policy think-tank stated, adding that no new debt is created and the national treasury remains insulated from a multi-trillion hemorrhage that would have been incurred under the Atiku crude oil discounted model.
Comparing the two pathways, Akinsiju said the Federal Government utilises a market-driven model with price mechanisms set on market-linked forward pricing, while Atiku is proposing a fiscally appropriated production subsidy model in which government pays the difference to refinery owners, explicitly capped and audited within the national annual budget.
He warned that forcing international oil companies and private joint-venture partners to surrender equity crude at government-mandated discounts, as encapsulated in Atiku’s subsidy model, would trigger contract breaches, investor flight, and costly international arbitrations while noting that the jettisoned subsidy regime was one of the reasons Nigeria failed to record Final Investment Decisions on new oil and gas projects in recent years until the President Tinubu administration came in board.
In addition, IMPI noted that the rebate is complemented by a forward crude sales arrangement designed to facilitate mid-term stability which translates to selling crude to local refiners at a pre-determined rate alongside a negotiated landing cost/gantry price of N1,350 per litre of petrol.
Akinsiju explained that the 30-day window “does not exist in a vacuum” but serves as an immediate fiscal bridge while mid-term structural solutions mature.
“The ₦1,350 per litre ceiling on the ex-gantry or landing cost of petrol is not a frozen price control but a month-smoothing mechanism reviewed every 30 days, with the formula translating to: N1,350 landing cost equals Platts (the global benchmark) multiplied by the Naira exchange rate, plus local logistics and port fees.
“Under the forward sales stabilisation framework, if a geopolitical shock, such as the conflict in the Strait of Hormuz, pushes the mathematical landing cost to ₦1,450, the ₦100 deficit is temporarily absorbed by refiners. When global prices drop and the actual landing cost falls to ₦1,250, the retail price remains at the ₦1,350 ceiling and the ₦100 surplus is harvested to offset the previous month’s deferred deficit.
“If the exchange rate or global crude moves permanently into a new price band, the steering committee will recalibrate the next month’s baseline ceiling — for instance, shifting it to ₦1,380 or ₦1,300 — to keep the system self-funding,” he added.
