Fuel Subsidy Proposal Retrogressive, Unsustainable — Presidency Replies Atiku

Fuel Subsidy Proposal Retrogressive, Unsustainable — Presidency Replies Atiku

The Presidency has criticised former Vice President Atiku Abubakar’s proposal to restore petrol subsidy, describing it as a retrogressive policy that could undermine Nigeria’s ongoing economic and petroleum-sector reforms.

The Special Adviser to the President on Information and Strategy, Bayo Onanuga, made the position known in a statement on Thursday titled, “Restoring petrol subsidies: Atiku’s volte-face and desperation for power.”

Onanuga said Atiku’s proposal represented a departure from his previous position on petrol subsidy, which he had supported removing during the 2023 presidential campaign.

According to him, the proposal was driven by political considerations ahead of the 2027 general election, rather than a sustainable economic plan.

“We respect Alhaji Atiku Abubakar’s constitutional right to propose alternative policies, to seek the support of Nigerians and recant a major policy prescription,” Onanuga said.

“However, Nigerians also deserve to understand what the proposed restoration of subsidy would actually mean, how it would be funded, and whether it is compatible with the legal and structural changes that have taken place in the petroleum sector.”

The Presidency explained that petrol subsidy was not simply money available in government coffers for distribution to consumers, but represented the difference between the regulated pump price and the actual cost of supplying the product.

It dismissed Atiku’s claim that the removal of subsidy had created a N30 trillion windfall for the government, describing the figure as inaccurate.

Onanuga said the subsidy regime had already been dismantled under the Petroleum Industry Act, which provided for its removal by the end of June 2023, adding that President Bola Tinubu only accelerated the process by a few weeks.

He argued that restoring the subsidy would therefore require a fresh legal, fiscal and administrative framework, including identifying a sustainable source of funding.

The presidential aide also maintained that Nigeria’s petroleum industry had changed significantly since 2023, particularly with the emergence of substantial domestic refining capacity.

He cited the Dangote Refinery and other local refineries as evidence that Nigeria was gradually moving away from dependence on imported refined petroleum products.

According to him, returning to a subsidy regime could undermine investments in domestic refining and reverse the gains recorded in local production.

He said the country was increasingly conserving foreign exchange by processing crude domestically and creating opportunities for industrial development, energy security and job creation.

Onanuga further said funds previously committed to subsidising petrol had become available to the three tiers of government, noting that about N3 trillion was shared from the Federation Account in July.

He argued that the increased allocations had strengthened the ability of state and local governments to pay salaries and execute infrastructure projects.

The Presidency acknowledged that higher petrol prices had placed considerable pressure on households and businesses but said sustainable solutions should focus on reducing energy costs without recreating the fiscal burden associated with subsidy.

It cited the government’s promotion of Compressed Natural Gas (CNG) as one alternative, noting that CNG could be significantly cheaper than petrol for transportation and logistics.

Onanuga said the debate over subsidy should therefore focus on how Nigeria could leverage domestic refining capacity, competition and improved regulation to achieve more stable and affordable energy prices.

He challenged Atiku to provide detailed answers on the proposed policy, including its annual cost, source of funding, possible borrowing requirements and the legal changes that would be necessary to implement it.

The presidential aide also asked how subsidy payments would be verified and protected from the abuses that characterised the former regime.

“Political promises must be backed by fiscal arithmetic,” Onanuga said, urging political actors to present Nigerians with the full fiscal and legal implications of any proposal to restore petrol subsidy.

He maintained that Nigeria could not afford to return to policies whose costs were hidden from citizens and later manifested as debt, reduced government spending and pressure on the naira.

The Presidency said Nigerians should welcome debate over the cost of living and economic policy but insisted that such discussions must reflect the country’s current petroleum and economic realities rather than those of the past.