The All Progressives Congress (APC) Presidential Campaign Council (PCC) has challenged Atiku Abubakar, presidential candidate of the African Democratic Congress (ADC), to explain the legal and fiscal bases of his petrol subsidy proposal. Atiku had proposed a "production subsidy" for locally refined petrol to reduce pump prices. APC PCC Spokesman, Dele Alake, stated that Atiku's proposal raises important questions that must be answered.
According to Alake, Section 205(1) of the Petroleum Industry Act 2021 states that unrestricted free-market conditions determine wholesale and retail prices of petroleum products. The Nigerian Midstream and Downstream Petroleum Regulatory Authority explained that it does not fix pump prices or issue administrative price templates, except where statutory conditions for intervention are met. The agency's function is guided by the PIA provisions.
Alake stressed that Atiku must explain whether a refinery receiving the proposed subsidy would be required to sell petrol at a prescribed price. If so, he should identify the legal framework under which the government would impose that price condition and explain how it would operate consistently with the Petroleum Industry Act. If not, he should explain how public support to refiners would guarantee lower prices at filling stations.
The spokesperson noted that Atiku must also disclose the cost of his proposal and how he would fund it. Alake said Atiku's earlier statement suggested that the intervention could take the form of preferentially priced crude for domestic refineries. Any discount on crude would reduce the value accruing to the Federation and, consequently, the revenue available to the federal, state and local governments.
Alake stated that based on publicly reported refinery throughput and domestic petrol-supply figures, the cost of the new subsidy could run as high as N17 or N21 trillion annually. The assumptions must be clearly defined, and Nigerians deserve to know the proposed subsidy rate, annual spending ceiling, volume of crude or petrol to be covered, source of funding, and mechanism guaranteeing lower pump prices.
The APC PCC Spokesman emphasised that safeguards against diversion, smuggling, and fraudulent claims must be in place. He also questioned whether amendments to the Petroleum Industry Act would be required. Alake argued that an appropriation by the National Assembly might authorise expenditure, but it would not by itself resolve every relevant issue.
The challenge by the APC PCC comes as Nigerians continue to grapple with the high cost of petrol. Atiku's proposal has sparked a national debate on the best way to address the issue. The APC PCC is demanding clarity on the proposal, citing concerns over cost, funding, and the potential impact on the economy.
Key points
- The proposed subsidy could cost as high as N21 trillion annually.
- Atiku's proposal raises important legal, fiscal, and practical questions.
- The APC PCC is demanding clarity on the proposal, citing concerns over cost, funding, and the potential impact on the economy.
