The Centre for the Promotion of Private Enterprise (CPPE) has defended the Federal Government’s temporary fuel price relief initiative through the Nigerian National Petroleum Company Limited (NNPC), insisting that the intervention does not represent a reversal of the petroleum subsidy removal policy.
The CPPE said the initiative should be viewed as a temporary response to an extraordinary global energy crisis rather than a return to the former petrol subsidy regime.
In a policy brief issued recently, the organisation’s Chief Executive Officer, Dr. Muda Yusuf, said the recent surge in petroleum prices was driven primarily by geopolitical tensions in the global energy market, which had pushed crude oil prices above $100 per barrel.
According to him, the development constitutes an external economic shock affecting both oil-producing and oil-importing countries and should not be attributed to Nigeria’s subsidy removal policy.
Yusuf argued that governments must retain the flexibility to introduce exceptional measures to cushion citizens and businesses against severe economic shocks without abandoning their fundamental economic reform programmes.
“Economic policies are instruments for promoting citizens’ welfare; they should not become rigid doctrines that prevent governments from responding to exceptional social and economic difficulties,” he said.
He noted that governments across the world had historically introduced temporary relief measures during extraordinary circumstances, citing interventions during the COVID-19 pandemic as an example.
CPPE Highlights Difference in Scale of Intervention
The organisation said the scale and structure of the current initiative distinguish it significantly from the former nationwide petrol subsidy arrangement.
According to the CPPE, the previous subsidy regime placed a substantial fiscal burden on the government, covering estimated national petrol consumption of between 50 million and 90 million litres daily at various times.
It said the arrangement created enormous fiscal pressures, weakened public finances, crowded out development spending and contributed to macroeconomic instability.
By contrast, the current intervention reportedly covers approximately 70 million litres of NNPC fuel supply monthly, compared with estimated national petrol consumption of about 50 million litres daily.
The CPPE stressed that the intervention neither reinstates a nationally administered petrol price nor imposes a general subsidy obligation on private petroleum operators.
It also argued that the measure does not dismantle the market-oriented framework for petroleum product pricing.
According to the organisation, these distinctions are critical to understanding why the initiative should not be interpreted as a return to the previous subsidy system.
NNPC Can Balance Commercial Interests with Public Welfare
On concerns surrounding the involvement of NNPC, the CPPE said the company’s commercial status does not prevent the government from deploying public assets to address exceptional public-interest concerns.
Yusuf noted that NNPC remained a government-owned commercial enterprise whose operations should ordinarily be guided by commercial considerations.
However, he maintained that temporary public-interest interventions could be accommodated within an appropriate governance framework.
He said such interventions must be transparent, proportionate, time-bound and financially sustainable to prevent them from undermining the company’s commercial discipline.
“Government ownership creates an opportunity to deploy public assets strategically in exceptional circumstances. It does not, however, justify an indefinite departure from commercial discipline,” the policy brief stated.
The CPPE added that the objective should be to reconcile commercial sustainability with legitimate public-interest obligations rather than treat the two as mutually exclusive.
Broad-Based Subsidy Could Undermine Reforms
The organisation reaffirmed its support for the removal of the former petroleum subsidy, describing it as a necessary structural reform.
It warned that reinstating a broad-based consumption subsidy would recreate fiscal vulnerabilities and economic distortions, particularly at a time when Nigeria faces significant infrastructure deficits, debt-service obligations and competing development priorities.
The CPPE, however, maintained that a limited and temporary intervention should not automatically be regarded as a deterioration in policy credibility.
It said investors were more concerned about policy predictability, market access, commercial viability, fiscal sustainability and the protection of legitimate investments.
According to Yusuf, the current initiative would not necessarily undermine investor confidence if the government avoided imposing commercially unviable prices, discriminating against private operators or introducing restrictions that distort competition.
The organisation emphasised that private-sector participation remained central to Nigeria’s downstream petroleum market and that preserving a competitive environment was essential to sustaining investment in domestic refining and fuel distribution.
CPPE Advocates Cheaper Public Transportation
Beyond the immediate fuel price relief, the CPPE called for broader interventions to address the effects of rising energy costs on household welfare and business operations.
It identified affordable mass transit as a priority, urging federal and state governments to invest in high-capacity buses powered by compressed natural gas (CNG), electricity and other economically viable alternatives.
According to the organisation, targeted investment in subsidised public transportation could deliver wider social and economic benefits than limited petrol price discounts.
It said cheaper transportation would reduce commuting costs for low-income workers, students and small business operators while improving labour mobility, protecting household purchasing power and lowering operating expenses for small enterprises.
The CPPE also called for increased support for agricultural productivity to mitigate the effects of higher energy prices on food production and distribution.
It noted that rising energy costs affected land preparation, irrigation, mechanisation, transportation, storage and food distribution.
The organisation therefore urged the government to improve access to fertilisers, agrochemicals, agricultural machinery and other productivity-enhancing inputs.
It argued that reducing the cost of food production and distribution should take priority over excessive reliance on general consumption subsidies.
States Urged to Introduce Targeted Relief Measures
The CPPE further called on state and local governments to play a more active role in cushioning citizens against the economic shock.
It said the responsibility for protecting households should not rest exclusively on the Federal Government, noting that subnational governments had significant responsibilities in public transportation, education, healthcare, agricultural development and local economic welfare.
According to the organisation, states could introduce designated discounted fuel outlets, subsidised public transportation and targeted support programmes for vulnerable households.
However, it stressed that such initiatives should have clearly defined eligibility criteria, specific time frames, transparent funding arrangements and safeguards against diversion.
The organisation also urged the government to protect the integrity of petroleum market reforms by sustaining market-based pricing, fair competition, transparent regulation and a trade policy framework supportive of domestic refining investment.
Reforms Must Protect Citizens, CPPE Says
In its conclusion, the CPPE maintained that Nigeria did not need a return to what it described as the fiscally destructive former subsidy regime.
Instead, it advocated a credible framework for temporary, targeted and transparent social protection during exceptional economic shocks.
The organisation said the immediate policy priority should be to protect vulnerable citizens, preserve public finance sustainability and maintain the credibility of ongoing economic reforms.
It added that the global energy crisis required pragmatic policy responses rather than ideological rigidity, stressing that economic reforms must remain sustainable while responding to the welfare needs of citizens.
“The priority should be to protect vulnerable citizens, preserve the sustainability of public finances and maintain the integrity of ongoing economic reforms,” Yusuf said.
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