The Presidency has rejected former Vice-President Atiku Abubakar’s proposal to restore petrol subsidy, arguing that reversing the policy would undermine ongoing reforms in Nigeria’s petroleum sector and create fresh fiscal and legal challenges.
The government also warned that a return to subsidy could discourage investments in domestic refining, including the Dangote Refinery and other modular refineries operating in the country.
Special Adviser to President Bola Tinubu on Information and Strategy, Bayo Onanuga, disclosed the position in a series of posts while reacting to Atiku’s pledge to reinstate petrol subsidy if elected president in 2027.
Onanuga described the proposal as retrogressive and fiscally unsustainable, saying it was driven by “desperation to win the presidency”.
He maintained that Nigeria’s petroleum industry had undergone fundamental changes since President Tinubu announced the removal of petrol subsidy.
Meanwhile, the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, said the subsidy removal had freed N15.8 trillion for the federation between June 2023 and December 2025.
Oyedele said the Federal Government received N5.4 trillion from the resources, while N10.4 trillion was distributed among state and local governments.
President Tinubu had also criticised Atiku’s position, describing the former vice-president as lacking sufficient understanding of governance and economic management.
The President spoke recently at the State House while receiving Osun State Governor Ademola Adeleke.
According to Tinubu, Atiku’s proposal to return to petrol subsidy reflected his level of ignorance about governance and the economy.
Atiku, who is contesting the 2027 presidential election under the African Democratic Congress, has made the restoration of petrol subsidy a major component of his campaign.
The former vice-president, who supported subsidy removal during the 2023 election campaign, has since argued that Nigerians have yet to enjoy tangible benefits from the policy.
He has also contended that the savings from subsidy removal have not sufficiently translated into improved living conditions or affordable food for Nigerians.
On the oil and gas sector, Atiku proposed a new intervention focused on domestic refining, with government support capped, budgeted and linked to measurable production and consumer benefits.
He said crude allocated under his proposal would be monitored and accounted for to ensure Nigerians derived tangible benefits from the intervention.
Atiku further argued that his proposal was not intended to revive the opaque subsidy system of the past, but rather establish a controlled mechanism to support Nigerian refineries and ensure cheaper crude feedstock benefits consumers.
However, financial expert and President of the Capital Market Academics of Nigeria, Prof. Uche Uwaleke, said the debate should not be limited to the immediate prospect of cheaper petrol.
He argued that the priority should be finding the most economically sustainable means of deploying scarce public resources to improve citizens’ welfare over the long term.
Uwaleke said the former subsidy regime had placed a huge burden on public finances and created opportunities for arbitrage, smuggling, rent-seeking and other abuses.
“The success of subsidy removal should not be measured simply by whether government stopped paying the subsidy.
“It should be measured by whether it succeeded in converting that difficult sacrifice into a more productive economy, stronger public services, increased domestic production and a better quality of life for the ordinary Nigerian,” he said.
Similarly, global financial analyst and development economist, Prof. Ken Ife, criticised calls for a return to blanket petrol subsidies as a means of reducing pump prices.
Ife said Nigeria could not resolve its longstanding fuel and economic problems through artificially reducing prices at the point of sale.
He argued that returning to the former consumption-based subsidy arrangement would revive the distortions, inefficiencies and fiscal leakages associated with the system.
“In broad macroeconomic terms, and even in development economies, you do not subsidise consumption. What you subsidise is production.
“You cannot borrow money to pay for subsidy. That is unlawful when you consider Fiscal Responsibility Act. It does not recognise that as a legitimate expenditure or as a legitimate borrowing,” he said.
A civil servant, Ibrahim Abbas, however, said Nigerians had expected subsidy removal to provide the Federal Government with additional resources to speed up infrastructure development and stimulate economic growth.
“The only thing we civil servants have experienced since subsidy was removed is economic hardship and a huge depletion of the purchasing power of the Naira.
“The implementation of the new minimum wage is still shrouded in confusion, and all these make Atiku’s proposal attractive to ordinary Nigerians ” he said.
A retired civil servant, Mr Sule Aliu, also said the economic situation had been particularly difficult for retirees since the subsidy was removed in 2023.
President Tinubu announced the removal of petrol subsidy on May 29, 2023, shortly after taking the oath of office.
The policy triggered a sharp increase in petrol prices, with pump prices rising from below N200 per litre to more than N1,000 in subsequent periods, while transportation, food and other living costs also increased.
The controversy over the policy has remained a major economic and political issue ahead of the 2027 general elections.
(DAILY TRUST)
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