Nigeria Slashes Petrol Price to N1,350 Per Litre as Fitch Upgrades Economic Outlook
The Nigerian government has announced a new petrol price of N1,350 per litre and is negotiating a ceiling on the ex-gantry cost of the fuel. The move comes as Fitch Ratings revised Nigeria's credit outlook from Stable to Positive, citing economic reforms.
Nigeria's government has announced a new petrol price of N1,350 per litre at designated stations run by the Nigerian National Petroleum Company Limited (NNPCL), the state-owned oil company [260078]. The Federal Government is also negotiating a N1,350 per litre ceiling on the ex-gantry or landing cost of petrol, according to Taiwo Oyedele, the Minister of Finance and Coordinating Minister of the Economy [257878].
The ex-gantry cost is the price of petrol as it leaves the depot, before transport and other charges are added. The landing cost is the total expense of bringing the fuel into the country. The move aims to limit price volatility as global crude oil and refined petroleum product prices rise [257878].
The government has rejected calls to bring back petrol subsidies, warning that returning to the old price could cost more than N20 trillion every year. Oyedele said the move could also weaken the exchange rate to about N3,000 per dollar, with petrol potentially selling for at least N2,000 per litre [257887]. The government removed the subsidy as part of broader economic reforms, and officials argue that restoring it would put heavy pressure on public finances and the naira [257887].
As elections approach, the government is telling a story of economic recovery, pointing to macroeconomic progress and promising better days ahead. But many citizens are asking what happened to the money saved from removing the petrol subsidy, a question that has become a test of trust [257891].
In a related development, Fitch Ratings has revised Nigeria's credit outlook from Stable to Positive. The agency cited growth in foreign exchange reserves, easing inflation, and economic reforms as key reasons for the change [259100]. A credit outlook is an agency's view on whether a country's ability to repay its debts is likely to improve or worsen. A move to Positive means the rating could be raised in the future [259100]. The Nigerian government has responded to the upgrade, seeing it as a sign that its economic policies are working [259100].
The finance minister also announced new measures to reduce the impact of high energy costs, including a petrol discount for public transport operators. This aims to lower transportation costs for citizens as the country prepares for elections [258949].