Atiku’s pledge to restore fuel subsidy, an opportunistic recant — Presidency

The Presidency has dismissed the pledge by former Vice-President and Presidential candidate of the African Democratic Congress (ADC), Atiku Abubakar, to restore fuel subsidy, describing it as an opportunistic recantation by someone desperate for power.

Bayo Onanuga, Special Adviser to the President on Information and Strategy, made this known in a statement on Thursday.

“If I win the presidential election, I will restore the subsidy. And anyone who stole Nigeria’s subsidy funds must return the money,” he declared while speaking during a Hausa-language interview programme.

The Presidency, which recalled that Atiku had canvassed the removal of fuel subsidy in the run-up to the last general election, accused him of being ignorant of the existing Petroleum Industry Act (PIA), which it said had made the subsidy regime illegal from the end of June 2023.

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Onanuga maintained that restoring the subsidy would require fresh legislative and fiscal measures to make it effective and legal.

The presidential spokesperson also noted that the midstream and downstream sectors of the petroleum industry had been positively transformed by huge investments in local refining by indigenous players, making a return to the old era of petrol importation unpopular.

“The petrol subsidy regime that Nigerians knew before May 2023 was dismantled as part of the country’s petroleum-sector reforms. The Petroleum Industry Act established a new framework for the downstream petroleum market. It removed the subsidy, as was previously done for diesel, kerosene and aviation fuel, ending a system that had placed a substantial and often unpredictable burden on public finances. The PIA scheduled the subsidy removal by the end of June 2023. President Tinubu only accelerated it by weeks to stop further bleeding before the due date.

“Restoring the old arrangement therefore cannot simply be presented as a matter of announcing that government will once again pay part of the cost of petrol. It would require a clear legal, fiscal and administrative framework, including identifying the source of the funds and determining how such a policy would be implemented under the present petroleum-market structure.

“More importantly, Nigeria’s petroleum landscape has changed significantly since May 2023. For many years, the country relied heavily on imported petrol, with the government bearing the consequences of the gap between the regulated pump price and the cost of supplying the product. Today, the emergence of substantial domestic refining capacity has fundamentally altered that equation. The Dangote Refinery has become a major source of locally refined petrol. Indeed, the Dangote Refinery would not have kickstarted production for local consumption were the subsidy regime operative. This is an important point that Atiku deceptively ignored.

“Atiku’s proposal portends a reversal of current local production, and it will spell bankruptcy for smaller local refineries like Aradel’s, causing attendant job losses and a loss of foreign exchange. Because the sector is now market-driven, Nigeria now exports refined products to Europe, Asia, and the United States, restoring national pride. This development is a sharp contrast to when Obasanjo and Atiku were in power: Nigeria’s largest import, costing about $10 billion, was refined products! President Tinubu has flipped that to Nigeria’s advantage.”

While dismissing the claim of a missing N30 trillion subsidy windfall attributed to the ADC presidential candidate, the Presidency expressed concern that Atiku’s proposal would reverse the gains from the removal of the subsidy regime, which it said had enabled the three tiers of government to become financially stable and meet the needs of Nigerians.

“The N15 trillion that would have been borrowed and spent on selling discounted petrol has now significantly gone into the coffers of the three tiers of government. Now all states are fiscally stable and can pay salaries regularly and embark on infrastructure projects. In July, the three tiers shared about N3 trillion, a record, from the federation account. That is a major achievement, since the abolition of petrol price discount and distortions in the foreign exchange regime.

“Nigeria is increasingly moving from a model in which scarce foreign exchange is used to import refined petrol to one in which crude oil, largely sold in Naira, can be processed domestically and supplied to the Nigerian market. That transition creates opportunities for greater energy security, foreign-exchange conservation, industrial development and ultimately a boost to employment generation.

“The subsidy debate must therefore be grounded in the realities of today’s market rather than treated as though Nigeria’s petroleum sector has remained unchanged.”

The statement urged all political actors, including Atiku Abubakar, to present Nigerians with the full fiscal and legal implications of any proposal to restore fuel subsidy.