The Presidency has dismissed former Vice-President Atiku Abubakar’s proposal to introduce a production-based petrol subsidy, arguing that Nigeria lacks sufficient uncommitted crude oil to implement the plan without placing additional pressure on public finances.
The Special Adviser to President Bola Tinubu on Media and Public Communications, Sunday Dare, described the proposal as “a dangerous mathematical fantasy wrapped in political deceit,” insisting that the country’s crude oil production figures do not translate into volumes freely available to the Federal Government.
Dare stated this in a statement issued on Sunday titled, Atiku’s Demagoguery in the Face of Tinubu’s Logical Policies, in response to the former vice-president’s criticism of the administration’s fuel pricing policies.
Atiku, the African Democratic Congress presidential candidate, had criticised the 30-day petrol discount introduced by the Nigerian National Petroleum Company Limited Retail and the proposed price modulation framework, describing the initiative as a panic-driven measure.
According to Dare, Atiku had also accused Tinubu of adopting his economic proposals without implementing the production subsidy he considered essential to making the policy effective.
The presidential aide, however, argued that the proposal failed to account for Nigeria’s existing crude oil obligations and the volume of oil available to the government after contractual commitments to oil-producing partners.
Citing the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, Dare said Nigeria produces approximately 1.8 million barrels of crude oil daily for a population exceeding 200 million.
He maintained, however, that the government does not own all the crude produced in the country because of production-sharing contracts, joint ventures, royalties and other contractual obligations.
According to him, these arrangements significantly reduce the volume of crude available for the government’s direct use, leaving fewer than 700,000 barrels per day in uncommitted volumes.
“To propose a blanket ‘targeted production subsidy’ on crude without the physical, unencumbered volume to back it up is pure economic illiteracy,” Dare said.
He warned that such a policy could recreate the problems associated with the former petrol subsidy regime, including opacity, fraudulent transactions and revenue losses.
“It invites the very opacity, fraudulent round-tripping, and fiscal haemorrhage that crippled Nigeria for decades under the old subsidy regime,” he added.
Presidency defends domestic crude supply arrangements
Dare also argued that Nigeria’s domestic refineries require substantial quantities of crude oil, making it difficult for the government to allocate additional volumes for a subsidy programme without compromising existing supply agreements.
He cited the Dangote Petroleum Refinery and other domestic refiners, noting that their crude requirements exceed what the government can freely supply without affecting contractual obligations.
The presidential aide rejected comparisons between crude oil allocation and agricultural commodities such as garri and cassava, arguing that such comparisons failed to reflect the complexities of the international oil market.
He also referenced the United States, which he said produces more than 10 million barrels of crude oil daily for a population of approximately 330 million but sells petroleum products at market prices.
Qatar was another example cited by the Presidency in defending the government’s position on subsidies. Dare said the country had also reduced energy subsidies despite its substantial gas reserves and relatively small population.
NNPC discount not a return to subsidy, Presidency insists
The Presidency also rejected Atiku’s suggestion that the petrol discount offered by NNPC Retail represented a return to the subsidy system abolished by the Tinubu administration.
Dare said the discount was introduced as part of activities marking Nigeria’s 66th Independence anniversary, with the company subsequently offering to extend the initiative for another 30 days.
He maintained that the arrangement was designed to cushion consumers against short-term fluctuations in international crude oil prices rather than reintroduce government-funded subsidies.
“When NNPC Retail agrees to sell fuel at landing cost for 30 days during an unprecedented global crude price spike, it is not writing checks to opaque import cartels,” Dare said.
He added that the initiative was supported by Tinubu and was intended to absorb temporary market shocks.
The presidential aide also defended the negotiated interim ceiling of N1,350 per litre on ex-gantry costs, describing it as “a structural shock absorber, not price control.”
Under the arrangement, Dare said, refiners and importers would absorb temporary increases in costs above the ceiling and recover them when crude prices declined or exchange-rate movements became more favourable.
He said the ceiling would be reviewed monthly based on published cost audits.
Defending the need for price stability, Dare argued that relatively consistent petrol prices would provide greater economic predictability for households and businesses than frequent increases and reductions.
“N1,400 today and N1,400 tomorrow provides far greater economic stability than N1,500 today and N1,300 tomorrow,” he said.
He added that sudden increases in petrol prices often trigger higher transport fares that do not necessarily decline when fuel prices subsequently fall.
Presidency lists alternative economic measures
The Presidency also highlighted other measures it said were intended to ease the impact of petrol price fluctuations and reduce the country’s dependence on imported fuel.
These include the development of a strategic energy reserve, the expansion of compressed natural gas infrastructure, the supply of crude oil to domestic refineries in naira and proposed windfall taxes on energy operators making excessive profits.
Dare said compressed natural gas could cost between 60 and 70 per cent less than petrol, presenting it as a cheaper alternative for motorists and transport operators.
He also cited plans to channel proceeds from windfall taxes towards transport vouchers and minimum-wage support, alongside enforcement of the 2025 tax reform laws to eliminate illegal road levies.
According to the presidential aide, the removal of petrol subsidies and the unification of the exchange rate had ended what he described as a multi-trillion-naira drain on public funds.
He argued that the savings had strengthened allocations to the 36 states and local governments through the Federation Account Allocation Committee.
Dare further claimed that fuel queues had been eliminated and the gap between the official and parallel foreign exchange markets had closed.
Presidency hits back at Atiku
The statement also took aim at Atiku over his reported description of Tinubu as a dull student, with Dare defending the President’s academic background.
“It is sheer absurdity that a man who graduated from a school of hygiene dares to call a first-class accounting graduate a dull student,” he said.
The presidential aide concluded by arguing that Nigerians should assess the administration’s economic policies based on their long-term implications rather than embrace what he characterised as short-term political promises.
He said, “The Nigerian electorate is far too sophisticated to trade long-term national economic security for Atiku’s shallow, short-term demagoguery.”
The exchange comes as fuel prices and the broader cost-of-living crisis remain major issues in the debate over the Tinubu administration’s economic reforms and competing policy proposals ahead of the 2027 general election.
