Presidency has strongly criticised former Vice President Atiku Abubakar’s proposal to restore petrol subsidy if elected president, describing the plan as economically unsustainable, legally complicated and driven by political desperation rather than sound fiscal policy.
In a statement issued on Thursday by the Special Adviser to the President on Information and Strategy, Bayo Onanuga, the Presidency said Atiku’s latest position marked a sharp departure from his earlier advocacy for the removal of fuel subsidy before the 2023 general election.
According to the Presidency, the former vice president’s proposal represents a reversal of a key economic position he previously championed and fails to reflect the realities of Nigeria’s current petroleum sector.
The statement argued that bringing back subsidy would undermine ongoing reforms in the downstream oil sector, discourage local refining, increase public debt and reverse gains made since the subsidy regime was abolished.
It maintained that the Petroleum Industry Act (PIA) had already provided for the end of petrol subsidy by June 2023, noting that President Bola Tinubu only accelerated its implementation by a few weeks after assuming office.
The Presidency also dismissed claims that the Federal Government realised about ₦30 trillion in savings from subsidy removal.
«”Contrary to Atiku’s claim in his interview, no N30 trillion subsidy windfall or savings exists anywhere except in his imagination.”»
It explained that the old subsidy regime involved government absorbing the difference between the actual landing cost of petrol and the regulated pump price, leading to huge financial losses and unpaid subsidy obligations running into trillions of naira.
According to the statement, restoring subsidy would require a fresh legal, fiscal and administrative framework, including identifying sustainable sources of funding and possible amendments to existing petroleum laws.
The Presidency further argued that Nigeria’s petroleum industry has undergone significant changes since the removal of subsidy, particularly with the commencement of large-scale local refining by the Dangote Refinery and other domestic refiners.
It warned that reintroducing subsidy could discourage local refining investments, threaten smaller refineries and increase dependence on imported petroleum products.
The statement noted that funds previously spent on subsidising petrol are now being shared among the three tiers of government, enabling states to improve salary payments and execute infrastructure projects.
It cited the recent distribution of about ₦3 trillion from the Federation Account as evidence of improved public finances following the removal of petrol subsidy and reforms in the foreign exchange market.
Questioning the practicality of Atiku’s proposal, the Presidency said Nigerians deserve detailed explanations on how the programme would be financed.
«”In practical terms, therefore, Nigerians should ask a straightforward question: If the subsidy is restored, who pays for it? What will the new pump price be? N200 or N500? If petrol is sold below its economic cost, which is about N1,200 to N1,300, someone must absorb the difference.”»
It added that any subsidy payment would ultimately come at the expense of public funds through increased borrowing, reduced allocations to states and local governments, or cuts in spending on infrastructure and social services.
While acknowledging the economic hardship caused by rising fuel prices, the Presidency said the Tinubu administration is pursuing alternative measures to reduce transportation costs, including the expansion of Compressed Natural Gas (CNG) adoption.
The statement said government remains committed to promoting cheaper energy alternatives rather than returning to what it described as an opaque and fiscally burdensome subsidy regime.
«”We believe sustainable relief is different from recreating a fiscal arrangement that will again cripple our country.”»
The Presidency called on all political actors seeking elective office to present Nigerians with detailed fiscal and legal implications of their policy proposals.
It urged Atiku to explain the annual cost of restoring subsidy, the proposed source of funding, whether new borrowing would be required, and whether amendments to the Petroleum Industry Act would be necessary before such a policy could be implemented.
According to the Presidency, debates over Nigeria’s economic future should be based on present-day realities rather than policies that previously imposed significant financial burdens on the country.