Nigeria petrol discount scheme faces rising costs amid oil price surge

Nigeria’s government-led petrol discount programme is facing significant fiscal challenges due to rising global crude oil prices. The initiative, which requires NNPC retail outlets to sell petrol at cost without a profit margin, could see its 30-day cost rise from an estimated ₦99 billion to approximately ₦114 billion if Brent crude reaches $120 per barrel.

Rising prices are driven by geopolitical tensions in the Middle East, specifically around the Strait of Hormuz and the Red Sea, which have disrupted shipping. Goldman Sachs has warned that prices could hit $120 per barrel if vessel attacks intensify.

In addition to macroeconomic pressures, consumers face localized issues with fuel retail. The Federal Competition and Consumer Protection Commission (FCCPC) has warned motorists about pump manipulation. Common fraudulent tactics include attendants failing to reset meters to zero before dispensing fuel and manually operating nozzles to bypass automatic locking mechanisms, resulting in motorists receiving less fuel than they paid for.