The Presidency has dismissed former Vice President Atiku Abubakar’s proposed petrol production subsidy, describing the plan as unrealistic and arguing that Nigeria lacks sufficient freely available crude oil to sustain the policy.
The position was made known by Sunday Dare, Special Adviser to President Bola Ahmed Tinubu on Media and Public Communications, in a statement titled “Atiku’s Demagoguery in the Face of Tinubu’s Logical Policies.”
Dare criticised Atiku, the presidential candidate of the African Democratic Congress (ADC), over his proposals for reducing petrol prices and easing the economic hardship facing Nigerians. The Presidency argued that the proposal raises serious questions about the availability of crude oil, the cost of implementation and the risk of returning to a subsidy system that previously placed considerable pressure on public finances.
Presidency Questions Availability of Crude Oil
According to the Presidency, Nigeria’s total crude oil production does not represent the volume of oil freely available to the Federal Government for financing a production subsidy.
The administration cited an estimated national production level of approximately 1.8 million barrels per day but argued that production costs, royalties, joint-venture arrangements and production-sharing contracts significantly reduce the quantity of crude available for government use.
Dare maintained that fewer than 700,000 barrels per day were available as unencumbered crude, arguing that the government could not base a nationwide subsidy programme on oil volumes it did not directly control.
The Presidency warned that offering crude oil to domestic refiners at preferential prices without a clearly established supply and funding arrangement could create additional financial and administrative difficulties.
It also argued that domestic refineries require substantial quantities of crude oil, meaning the government would have to consider existing supply commitments and competing demands before implementing Atiku’s proposal.
Atiku Proposes a Different Approach to Fuel Subsidy
Atiku has argued that Nigeria should consider a targeted production subsidy rather than return to the previous system of subsidising imported petrol.
Under his proposed approach, eligible domestic refineries would receive crude oil at preferential prices, subject to production requirements, transparency measures and conditions designed to ensure that the benefits reach Nigerian consumers.
The former vice president has maintained that the objective is to reduce energy costs, support local refining and ease the pressure of high petrol prices on households and businesses.
His proposal also seeks to distinguish between the former import-based subsidy arrangement and a production-focused intervention linked to domestic refining.
However, the Presidency has questioned how the proposed arrangement would be financed, how much it would cost and whether it could operate within Nigeria’s existing petroleum-sector framework.
Presidency Warns Against a Return to Past Problems
The Presidency argued that Nigeria’s former petrol subsidy system contributed to substantial financial pressure on public resources and created opportunities for abuse, including fraudulent claims and opaque transactions.
Dare warned that introducing another subsidy arrangement without adequate safeguards could recreate some of the problems associated with the previous system.
The administration also questioned whether preferential crude allocation would automatically translate into lower pump prices, stressing the need for transparent pricing arrangements and a clear explanation of how savings would reach consumers.
It maintained that any proposed intervention should be supported by reliable production figures, an identifiable funding mechanism and an accountability framework capable of preventing the diversion of public resources.
The Presidency has therefore insisted that Atiku must provide further details about the practical implementation of his plan before it can be considered a workable alternative to the current policy.
Government Defends Its Approach to Fuel Prices
The Tinubu administration also defended measures intended to cushion the effects of fluctuations in global crude oil prices and domestic fuel costs.
Among the measures highlighted by the Presidency were temporary petrol discounts through NNPC Retail and a price framework intended to reduce the immediate impact of sharp cost increases.
Dare described the temporary discount as a short-term commercial intervention rather than a restoration of the former subsidy regime.
The Presidency argued that predictable fuel prices could help households and businesses plan their expenses more effectively, particularly because sudden increases in petrol prices often affect transport fares and the cost of distributing goods.
The administration also pointed to compressed natural gas as a potential alternative for reducing transport costs, alongside measures intended to strengthen domestic refining and improve energy supply.
Fuel Subsidy Debate Intensifies Ahead of 2027 Elections
The disagreement has added to the economic debate ahead of Nigeria’s 2027 general elections, with the cost of living, petrol prices and the impact of subsidy removal remaining major public concerns.
Atiku has presented his proposal as an alternative approach intended to lower energy costs and support domestic production. The Presidency, however, argues that the plan must be accompanied by convincing answers about crude availability, financing, legal requirements and implementation.
The central issue is whether a targeted production subsidy could reduce petrol prices without placing unsustainable pressure on government finances or creating opportunities for abuse.
For Nigerians facing high transportation, food and business costs, the debate has significant implications. Any policy intended to reduce fuel prices would need to demonstrate how the benefits would reach consumers and how the government would cover the associated costs.
As the political debate continues, the Presidency maintains that Atiku’s proposal is unrealistic under the country’s current crude oil supply arrangements, while the former vice president’s position centres on using a targeted intervention to make domestic fuel production more affordable.
The ultimate test for either approach will be whether it can deliver sustainable relief to Nigerians while maintaining transparency, protecting public finances and supporting the long-term development of the petroleum sector.