Presidency Rejects Atiku’s Call To Restore Petrol Subsidy

The Presidency has rejected former Vice-President Atiku Abubakar’s proposal to restore petrol subsidy, describing it as a retrogressive policy that could undermine Nigeria’s fiscal stability and recent reforms in the petroleum sector.

Special Adviser to President Bola Tinubu on Information and Strategy, Bayo Onanuga, said Atiku’s proposal represented a reversal of his previous position on subsidy removal and urged Nigerians to examine the fiscal and legal implications of bringing back the policy.

In a statement on Thursday titled “Restoring Petrol Subsidies: Atiku’s Volte-face and Desperation for Power,” Onanuga said Atiku was entitled to propose alternative policies but must explain how a renewed subsidy regime would be funded.

He argued that the former subsidy system was not simply a government discount but involved the state absorbing the difference between the regulated pump price and the actual cost of supplying petrol, placing a significant burden on public finances.

According to him, the Petroleum Industry Act (PIA) had already provided for the removal of petrol subsidy by the end of June 2023, while President Tinubu only accelerated the process by a few weeks after assuming office.

Onanuga said restoring subsidy would therefore require a clear legal, fiscal and administrative framework, including identifying the source of funding and determining how the policy would operate within Nigeria’s restructured petroleum market.

He also pointed to changes in the downstream sector since 2023, particularly the growth of domestic refining capacity.

The presidential aide said the emergence of the Dangote Refinery and other local refineries had changed Nigeria’s petroleum landscape by reducing dependence on imported refined products and creating opportunities for energy security, foreign-exchange conservation and industrial development.

He warned that a return to the former subsidy regime could undermine the growth of local refining and discourage investment in the sector.

Onanuga further argued that funds previously used to support subsidised petrol could now be retained within the federation and shared among the three tiers of government.

He cited the approximately N3 trillion shared from the Federation Account in July as an example of the increased revenue available to governments following the removal of petrol price and foreign-exchange distortions.

The Presidency acknowledged the hardship caused by higher petrol and transport costs but said sustainable relief should not come through the restoration of a system that it described as fiscally burdensome and vulnerable to abuse.

Onanuga highlighted the Federal Government’s promotion of Compressed Natural Gas (CNG), which he said was significantly cheaper than petrol for vehicles, taxis and distribution trucks.

He urged political actors proposing a return to subsidy to provide Nigerians with specific answers on the cost of the programme, its funding source, whether additional borrowing would be required and whether existing petroleum legislation would need to be amended.

He also questioned what exactly a renewed subsidy would cover in an increasingly domestic-refining-driven market.

“Political promises must be backed by fiscal arithmetic,” Onanuga said, insisting that Nigeria could not afford to return to policies whose costs eventually emerge as higher debt, reduced public spending and pressure on the naira.

He called for a robust national debate on the cost of living and economic policy but said such discussions must reflect Nigeria’s current economic and petroleum realities rather than the conditions of the past.