Minister Oyedele: 30-day discount is not enough. How did you arrive at ₦1,350 ex-gantry ceiling price?

By Olarinre Salako,

On October 8, 2026, Finance Minister Taiwo Oyedele announced a 30-day petrol discount at NNPC stations, prioritising public transport. He proposed a ₦1,350-per-litre ex-gantry or landing-cost ceiling, with suppliers temporarily absorbing excess costs for later recovery.

I welcome the relief. But why only 30 days instead of a sustained, targeted and elastic productive-energy subsidy until global energy-market disruptions subside or affordable alternatives become widely available? How was the ₦1,350 ex-gantry ceiling determined? Without transparent cost calculations, that ceiling risks becoming an anchor for inflated prices.

Modelling fair fuel prices

At Brent’s $103.36 per barrel and CBN’s ₦1,332.10-per-dollar exchange rate, crude has an international-parity value of ₦137,686 per barrel.

Refining margins measure product values less crude-input costs and cover operating costs, depreciation, financing and returns.

Published 2025 international refining margins provide benchmarks: Repsol (Spain) $7.90, OMV (Austria) $10.10, Valero (US Gulf Coast) $11.84, Phillips 66 (Central Corridor) $13.26 and Marathon (Gulf Coast) $14.82 per barrel. Repsol, Valero and Marathon represent the lowest, middle and highest benchmarks.

We retain the IMF-cited indicative product mix—55 percent petrol, 26 percent diesel and 19 percent aviation fuel—because Dangote’s reported 39.9 percent petrol share lacks corresponding diesel and aviation-fuel percentages. Applying historical relative price weights and 159 assumed saleable litres per barrel yields illustrative ex-gantry prices. Repsol produces approximately ₦817 for petrol, ₦1,139 for diesel and ₦988 for aviation fuel per litre; Valero gives ₦844, ₦1,177 and ₦1,021; and Marathon gives ₦866, ₦1,208 and ₦1,049, respectively.

Allowing ₦60–₦220 per litre for downstream costs and margins, our model suggests pump prices of ₦877–₦1,086. This raises questions about the FG’s proposed ₦1,350 ex-gantry ceiling and Dangote Refinery’s reported ₦1,324 ex-gantry price in early October. Without cost disclosures, how can Nigerians distinguish reasonable returns from excessive pricing?

Domestic refining avoids some freight and offshore handling costs, while lower labour costs partly offset financing constraints. On October 8, average Texas petrol cost $3.659 per US gallon, approximately ₦1,288 per litre, including ₦135 in federal and state petrol taxes. Nigeria’s petrol VAT waiver should favour lower pump prices.

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