Presidency Calls Atiku's Fuel Subsidy Plan Unrealistic

The Presidency on Sunday dismissed former Vice President Atiku Abubakar's proposed petrol production subsidy as "a dangerous mathematical fantasy wrapped in political deceit." They stated that Nigeria does not have the crude oil volumes to support it.

Sunday Dare, the Special Adviser to the President on Media and Public Communications, made this known in a statement released on Sunday. The statement was titled ‘Atiku’s Demagoguery in the Face of Tinubu’s Logical Policies.’

Dare described Atiku's recent press conference in Abuja as "a seminal example of shallow, election-laced demagoguery." Atiku had criticized the 30-day discount on petrol by NNPC Retail. He also called a price modulation framework a "panic-driven gimmick," according to Dare. Atiku claimed that President Bola Tinubu copied his economic ideas but failed to include the production subsidy that would make it effective.

Dare pointed to the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, who said on Channels Television that Nigeria produces about 1.8 million barrels of crude oil daily for a population of over 200 million. But the presidency noted that the Federal Government does not own all this oil.

The presidency explained that under joint ventures and production sharing contracts signed over the years, production costs, royalties, and profit-sharing agreements significantly reduce the amount of crude oil available to the state. They said less than 700,000 barrels per day of free crude can actually be accessed.

“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 added that it invites "the very opacity, fraudulent round-tripping, and fiscal haemorrhage that crippled Nigeria for decades under the old subsidy regime."

The presidency also mentioned that refineries like the Dangote Petroleum Refinery need more feedstock than the state can provide without breaking international supply contracts. This is why Dangote and other local refiners also import crude.

They rejected comparing crude oil allocation with farm products like garri or cassava, saying that it misrepresented commodity markets. The presidency also highlighted the United States, which produces over 10 million barrels per day for 330 million people but sells petroleum at market prices. They pointed to Qatar, which had to cut energy subsidies despite having large gas reserves and a population of under 500,000.

The presidency rejected Atiku's claim that the NNPC Retail discount was a return to subsidy. They said NNPC offered the discount to celebrate Nigeria's 66th Independence anniversary and has now extended it for another 30 days.

“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. It is using its corporate resources to handle short-term global price changes, directly backed by President Bola Ahmed Tinubu,” Dare explained.

He mentioned that the negotiated interim ceiling of N1,350 per litre on ex-gantry costs was “a structural shock absorber, not price control.” Under this arrangement, refiners and importers handle short-term cost increases above the ceiling and recover those costs later when crude prices drop or the exchange rate improves.

The ceiling is reviewed monthly based on published cost audits, the statement added. “N1,400 today and N1,400 tomorrow provides far greater economic stability than N1,500 today and N1,300 tomorrow,” Dare said. He noted that unstable fuel prices lead to transport fare hikes that rarely go back down.

The presidency also listed other actions taken by the administration. This includes a state-backed strategic energy reserve, a quick rollout of compressed natural gas that is 60 to 70 percent cheaper than petrol, and naira-for-crude supply to local refineries. They also mentioned windfall taxes on energy companies that exploit consumers, with proceeds for transport vouchers and minimum-wage support. Enforcement of the 2025 tax reform laws to eliminate illegal road levies was also highlighted.

Dare said the removal of the petrol subsidy and the unification of the exchange rate ended a multi-trillion-naira drain on public funds. He explained that funds now flow to the 36 states and local governments through FAAC allocations.

He added that fuel queues have disappeared and the gap between the official and parallel exchange rates has narrowed. Responding to Atiku’s statement calling Tinubu a “dull student,” the presidency said, “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.”

They concluded by saying, “The Nigerian electorate is far too sophisticated to trade long-term national economic security for Atiku’s shallow, short-term demagoguery.”