The Chief Executive Officer (CEO). Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, has said the Federal Government’s fuel price relief initiative through the Nigerian National Petroleum Company Limited (NNPC) should not be interpreted as a reversal of petroleum subsidy removal, describing it as a temporary intervention to cushion the impact of the global energy crisis.

In a policy brief issued yesterday, he said the recent escalation in petroleum product prices was driven principally by developments in the global energy market, particularly geopolitical tensions that had pushed crude oil prices above $100 per barrel.

Yusuf argued that the price surge was an external shock affecting both oil-producing and oil-importing economies and was neither a consequence of Nigeria’s subsidy removal policy nor peculiar to the country. He said extraordinary economic circumstances sometimes required exceptional policy responses, adding that governments across the world had intervened to protect households and businesses from severe external shocks without abandoning their underlying economic management frameworks.

According to him, the COVID-19 pandemic demonstrated that even advanced market economies could adopt temporary interventions to address exceptional economic difficulties.

He noted that the scale and structure of the current intervention distinguished it from the former petrol subsidy regime, which imposed a substantial fiscal burden on the government.

Under the previous arrangement, government effectively bore part of the cost of nationwide petrol consumption, estimated at between 50 million and 90 million litres daily at various times.

Yusuf argued that reported figures indicate that the current intervention covered approximately 70 million litres of NNPC fuel supply monthly, compared with estimated national petrol consumption of 50 million litres daily. He said that the initiative did not reinstate an administered national petrol price, impose a general subsidy obligation on private operators or dismantle the market-oriented framework for petroleum product pricing.

On NNPC’s commercial mandate, Yusuf said the company’s status as a government-owned commercial enterprise did not prevent it from participating in temporary interventions designed to address exceptional public-interest concerns.

He, however, stressed that such interventions must be transparent, proportionate, time-bound and financially sustainable.

According to him, government ownership provides an opportunity to deploy public assets strategically during exceptional circumstances, but does not justify an indefinite departure from commercial discipline.

He said the objective should be to reconcile commercial sustainability with legitimate public-interest obligations rather than treat the two as mutually exclusive.

On the implications for economic reforms and investor confidence, Yusuf maintained that the removal of the former petroleum subsidy was a necessary structural reform, warning that the reintroduction of a broad-based consumption subsidy would recreate serious fiscal vulnerabilities and economic distortions.

He said such an obligation would be fiscally unsustainable, particularly given Nigeria’s infrastructure deficits, debt-servicing commitments and competing development priorities.

However, he argued that a limited and temporary intervention should not automatically be regarded as a deterioration in policy credibility.

Yusuf said investors were primarily concerned about policy predictability, market access, commercial viability, fiscal sustainability and the protection of legitimate investments. He maintained that these fundamentals need not be compromised by a narrowly targeted emergency relief measure.

According to him, the private sector remains the dominant participant in the downstream petroleum market, adding that the current initiative need not undermine investor confidence if government avoids imposing commercially unviable prices, discriminating against private operators or introducing market restrictions that distort competition.

Beyond the fuel discount, he called for broader interventions to cushion households and businesses against the wider economic consequences of rising energy prices.

He said the limited coverage of the proposed relief meant its overall impact on household welfare would also be limited, urging federal and state governments to prioritise affordable mass transit.

He recommended increased investment in high-capacity buses, including compressed natural gas-powered and electric buses, alongside other economically viable alternatives.

According to him, targeted investment in subsidised public transportation could deliver broader economic and social benefits than limited petrol price discounts by reducing commuting costs for low-income workers, students and small business operators.

He said such measures would protect household purchasing power, improve labour mobility, reduce operating costs for small enterprises and stimulate economic activity.

He also urged government to support agricultural productivity and food supply, noting that rising energy costs increased expenditure on land preparation, irrigation, mechanisation, transportation, storage and food distribution

He also called for targeted support to improve farmers’ access to fertilisers, agrochemicals, agricultural machinery and other productivity-enhancing inputs.

Calling for stronger interventions by state and local governments, he said the responsibility for responding to the economic shock should not rest exclusively on the Federal Government.

He suggested that states could consider designated discounted fuel outlets, subsidised public transportation and targeted support for vulnerable households. Such programmes, he said, should have clear eligibility criteria, defined time frames, transparent funding arrangements and safeguards against diversion.

He also urged government to protect the integrity of petroleum market reforms by sustaining market-based pricing, fair competition, transparent regulation and a trade policy framework that supports domestic refining investment.

He said Nigeria does not need to return to what he described as the fiscally destructive subsidy regime but requires a credible framework for temporary, targeted and transparent social protection during exceptional economic shocks.

He stressed that the priority should be to protect vulnerable citizens, preserve public finance sustainability and maintain the integrity of ongoing economic reforms.

“The current global energy crisis demands pragmatic policy responses, not ideological rigidity. Economic reforms must remain sustainable, but they must also be responsive to the welfare of the people,” he said.