FG Proposes N1,350 Ceiling for Petrol Ex-Gantry Price: What It Means for You

The Federal Government has proposed a new plan to stabilize petrol prices and keep them from jumping up and down. They intend to set a ceiling of N1,350 per litre on the ex-gantry price of petrol. That sounds like the price you’ll pay at the pump, but it isn’t, so here is what it means.

What happened

The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, announced the measures at a press briefing in Abuja on Thursday. The briefing was about fuel prices and the subsidy question. He said the move became necessary because earlier measures had not fully eased the pressure on households and businesses after fuel and transport costs went up. 

What “ex-gantry price” means

The ex-gantry price, also called the landing cost, is what marketers pay at the depot before the fuel gets to the filling station. It is not what you pay at the pump.

The ceiling does not mean petrol will sell for N1,350 per litre at filling stations. The pump price will still include other costs, like transport and the station’s margin. 

How the plan works

If costs rise above the ceiling, refiners and importers will take the difference and recover it later, when crude prices or the exchange rate become more favorable. 

The ceiling will be reviewed every month, and the figures will be published. 

The minister gave a simple example of why this helps. He said a steady N1,400 today and tomorrow is better than N1,500 today and N1,300 tomorrow. In other words, a price you can plan around beats one that keeps swinging. 

Is it a subsidy?

The government says no. Oyedele said it is neither a subsidy nor price control, and that it is meant to smooth prices over time instead of suppressing them. 

Other things in the package

The ceiling is only one part of a bigger plan.

A 30-day discount. The government plans a temporary margin discount on petrol sold by NNPC Limited for an initial 30 days, with priority for public transporters nationwide. 

Crude oil sold ahead of time. The government also plans to sell crude oil to local refineries in advance. For example, it could tell refiners it will sell them crude at $80 a barrel for the next six months. That gives refiners certainty and should give buyers more stable prices. 

Ten measures in total. The government says it announced 10 measures to cushion the impact of rising petrol prices on households, businesses and transport users. 

Where prices stand now

NNPC recently cut its Lagos pump price by N5, from N1,360 to N1,355 per litre, and Abuja buyers pay N1,370. So pump prices are already close to the proposed ceiling, but remember the ceiling applies to the depot price, not the pump. 

What to watch

This is still a proposal. The government says it is “negotiating” the ceiling, so refiners and importers have to agree to it. The big questions are whether they will accept the losses when costs go above N1,350, and how long they can carry them before recovering the money. 

If it works, you may see fewer sudden price jumps at the pump. If it doesn’t, the old pattern of prices moving with crude oil and the dollar could continue. We’ll know more after the first monthly review.

Do you think a price ceiling will make petrol cheaper or more stable where you live? Tell us in the comments.