Nigeria will lower government-capped gasoline pump prices to 130 naira a litre, from 145 naira, four sources told Reuters on Wednesday.
State oil company NNPC imports nearly all the gasoline in Nigeria, Africa’s largest economy, because of price caps that mean marketers would lose money if they imported themselves.
President Muhammadu Buhari approved the lower price during a cabinet meeting. The government did not immediately give a reason for the decision, though benchmark crude prices have tumbled in the face of the coronavirus pandemic.
Prices for fuels such as gasoline have also collapsed because of a significant contraction in global demand.
The price cap typically costs the government millions because prices fluctuate regularly on the international market and rarely stay at the capped level.
The World Bank estimated the price caps cost the government 294 billion naira ($960.8 million), or nearly 0.2% of annual GDP, in the first half of 2019.
Nigeria’s Petroleum Products Pricing Regulatory Agency (PPPRA) pegged ex-depot prices at 125.63 naira a litre as of March 13.