…Says subsidy will cost N21trillion annually.
From Cyril Mbah, Abuja
The APC Presidential Campaign Council has challenged former Vice President Atiku Abubakar to explain the legal and fiscal basis of his proposed “production subsidy” for locally refined petrol.
Atiku, who is the candidate of the African Democratic Congress, (ADC), had at a press conference in Abuja on Friday reiterated his plan to reduce petrol pump price and he asked President Bola Tinubu to slash petrol and diesel prices.
In a statement issued on Sunday by its Spokesman, Dr. Dele Alake, the APC Campaign Council said the proposal raises important legal, fiscal and practical questions that Atiku must answer.
The Council cited Section 205(1) of the Petroleum Industry Act, PIA, 2021, which provides that unrestricted free-market conditions shall determine wholesale and retail prices of petroleum products.
It noted that the Nigerian Midstream and Downstream Petroleum Regulatory Authority, (NMDPRA), had explained it neither fixes pump prices nor issues price templates except where statutory conditions for intervention are met, adding that “No such market failure has been declared.”
The APC Campaign Council urged Atiku to explain whether a refinery receiving his proposed subsidy would be required to sell at a prescribed price, and under what legal framework that would operate consistently with the PIA.
If not, the Council said, Atiku should explain how public support to refiners would guarantee lower prices at filling stations, warning that without enforceable mechanism, refiners could receive benefits while consumers pay market prices.
The Campaign Council also demanded disclosure of cost and funding, saying any discount on crude for domestic refineries would reduce revenue accruing to the Federation and to federal, state and local governments, potentially triggering the fiscal crisis that left 27 states unable to pay salaries before 2023.
Based on publicly reported refinery output and domestic supply figures, the Council estimated the cost of the new subsidy could run as high as N17 trillion or N21 trillion annually, depending on discount size and volume covered.
It listed seven questions Atiku must answer, including subsidy rate, annual spending ceiling, volume of crude or petrol covered, source of funding, mechanism for lower pump prices, safeguards against diversion and smuggling, and whether PIA amendment would be required.
The APC Campaign Council said Atiku must reconcile his latest position with his previous support for deregulation, recalling that in November 2022 at Lagos Business School, he described petrol subsidy as fraudulent and pledged to complete its removal.
It noted that deregulation began under the Obasanjo-Atiku administration, with diesel deregulated in June 2003 and aviation fuel later, while kerosene was deregulated in 2016 under Buhari, with petrol the last product under subsidy scheduled to end in June 2023 under PIA.
The Council said President Tinubu’s administration has instead focused on lower-cost alternatives like Compressed Natural Gas, CNG, and electric mass transit, noting over 120,000 vehicles converted to CNG and fare reductions of 31 to 83 percent on routes served in seven states and FCT.
In contrast, it said Atiku is reaching into the past with another subsidy scheme, urging Nigerians to ignore politicians who want to return to the subsidy era of debts, queues and smuggling.
The Campaign Council concluded by stating that every downstream intervention must be lawful, transparent, properly costed and capable of delivering measurable benefits, urging Atiku to provide a detailed policy document and independent legal and fiscal analysis.
