Atiku’s Fuel Plan Will Subsidise Crude for Local Refineries — Abdullahi

The African Democratic Congress (ADC) says its presidential candidate, Atiku Abubakar, is proposing a new petrol subsidy model that would support domestic crude supply to refineries rather than subsidise petrol consumption at the pump.

ADC National Publicity Secretary, Bolaji Abdullahi, explained the proposal during an interview on TVC News’ Beyond the Headlines on Tuesday.

He said the fundamental difference between Atiku’s proposal and the previous subsidy regime was that the old system subsidised consumption, while the ADC plan would subsidise production.

“The old subsidy regime was subsidising consumption, the pump price, and artificially fixing the pump price of petrol,” Abdullahi said.

He explained that under Atiku’s model, the government would guarantee a threshold price for crude supplied to domestic refineries, with government support covering the difference where necessary.

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The objective, he said, would be to reduce the cost of production for local refineries and create a knock-on effect that would eventually lower petrol prices for consumers.

Abdullahi cited the Domestic Crude Supply Obligation contained in the Petroleum Industry Act, arguing that the legal framework already requires oil producers to make crude available for domestic use.

“What we are proposing is not bringing money to pay oil companies. It’s more about foregoing revenue,” he said.

He argued that the government could dedicate part of Nigeria’s crude production to domestic refineries at an agreed price instead of allowing local refiners to purchase all their crude at prevailing international market prices.

Abdullahi also compared the proposal with incentives already granted to oil companies, arguing that government support for the petroleum sector was not unprecedented.

However, when pressed on how much the proposed production subsidy would cost the country annually, he declined to provide a figure, saying ADC economists were still working on the details.

He promised that the party would publish the figures during the campaign.

Abdullahi also rejected concerns that a new subsidy system could become another channel for corruption and patronage.

He said the proposed arrangement would involve Nigerian refineries receiving crude at a predetermined rate, with government monitoring price movements and adjusting its support where necessary.

“It’s not the kind of model that supported the arbitrage of the past,” he said.

The ADC spokesman maintained that the party’s position was driven by the need to make petrol affordable to Nigerians, arguing that fuel prices have a direct impact on the cost of transportation, food and other essential goods.

He said the party would use the campaign period to provide Nigerians with further details on how the proposed subsidy model would work and how it would be financed.