Atiku's team plans to change petroleum law for production subsidy - Amaechi

The vice-presidential candidate of the African Democratic Congress (ADC), Rotimi Amaechi, says that if Atiku Abubakar becomes president, his government will seek to change Nigeria’s petroleum law. This change is necessary if the current law stops them from adding a production subsidy for fuel made in Nigeria.

Mr Amaechi shared his thoughts on Channels Television’s Politics Today on Friday. He explained how the ADC presidential ticket wants to support local refining without going back to the previous subsidy system for imported petrol.

“One of such things that we will introduce, if the law prohibits us from doing it, is that we will put immediately that President Atiku assumes office, a law before the National Assembly, a bill before the National Assembly that… introduces production subsidy. Immediately so that we can begin to implement it,” Mr Amaechi said.

When asked about the Petroleum Industry Act (PIA), the former governor of Rivers State said that an Atiku administration would follow the legal steps needed to put the policy into action. “How do we intend to introduce production subsidy? The same thing Tinubu could have done. By either repealing the law or going for an amendment. Because it’s about the lives of Nigerians,” he said.

“Everything we will do will be legal.” His comments were in response to questions from the All Progressives Congress (APC) Presidential Campaign Council on September 20. The council wanted Atiku to clarify the legal and financial basis of his proposal. They also asked if changes to the PIA would be needed, how the plan would be funded, and how it would lead to lower prices at the pump.

Mr Amaechi explained the proposed production subsidy using example numbers. He said the government would sell crude oil to local refiners at a lower price than what it sells for in the international market. The difference would be the subsidy. If crude oil costs N15,000, he said, the government could sell it to Dangote refinery and other modular refineries for N10,000, treating the N5,000 difference as the subsidy.

“If you sell at 10, what happens? The price of everything will just come down. Transport, fuel,” he said. Mr Amaechi assured that this support would not just be for Dangote Refinery. It would also help modular refineries, promoting more investment in local refining.

“We will also not only fund Dangote Refinery by way of subsidy, there are other modular refineries that are existing in Nigeria that will also benefit and produce for the economy,” he said. Mr Amaechi made it clear that this proposal is different from the last petrol subsidy system.

“We will introduce a subsidy. But not the type of subsidy that was removed. We will deal with production subsidy, which means no more importation of fuel,” he said. He argued that relying on imported fuel supports jobs outside Nigeria. If we refine more locally, it could create jobs in refinery building and operations.

Atiku has already suggested government support for locally made fuel if he wins in 2027. This idea has raised questions about its legal and financial effects. The APC campaign council has asked how the support for refiners would lead to lower prices for consumers.

When asked how soon they could lower the prices of food, petrol, and transport, Mr Amaechi said, “Give us one year. If you don’t begin to feel the change, I will leave.” He clarified that introducing the production subsidy would not take a year. But building up local refining and seeing its impact on the economy would take time.

“It will not be a one-day thing, it will be a gradual process, but before the end of a year, you will see how much improvement there will be in the economy,” he said. Mr Amaechi also criticized how the Tinubu government handled the removal of the petrol subsidy and the rising cost of living.

In a different part of the interview, he said he would step down as Atiku’s running mate to support President Bola Tinubu if petrol costs N600 per litre the next day. Mr Amaechi did not specify the exact discount Atiku’s government would apply to local crude oil, the quantity that would qualify, the annual cost of the program, or the way to ensure refineries pass the benefits to consumers.