The All Progressives Congress Presidential Campaign Council (APC-PCC) has expressed concerns over the proposed production subsidy for locally refined petrol by African Democratic Congress (ADC) presidential candidate, Atiku Abubakar. According to the APC-PCC, Atiku's plan lacks a clear legal framework, which may hinder its effectiveness in reducing fuel prices for Nigerians. The council's spokesperson, Dele Alake, made this known in a statement on Sunday, reacting to Atiku's proposal announced during a press conference in Abuja on Friday.
The APC-PCC questioned the legal, financial, and practical aspects of Atiku's plan, citing Section 205(1) of the Petroleum Industry Act 2021, which states that wholesale and retail prices of petroleum products should be determined by free-market conditions. The council also referenced a statement by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), which said it does not fix petrol prices except under conditions allowed by law. This raises questions about how the proposed subsidy would guarantee lower pump prices if refiners were not legally required to sell fuel at a fixed price.
The APC-PCC argued that without an enforceable mechanism, refiners could receive government support while consumers continued to pay market prices. The council asked Atiku to explain how much the subsidy would cost and where the money would come from. If the plan involved selling crude oil to local refineries at discounted prices, it could reduce the revenue shared by the Federal Government, state governments, and local governments. According to the APC-PCC, the proposed subsidy could cost between N17 trillion and N21 trillion annually, depending on the level of discount and the amount of crude covered.
The council challenged Atiku to answer seven key questions, including the proposed subsidy rate, annual spending limit, source of funding, safeguards against smuggling and diversion, and whether he intends to amend the Petroleum Industry Act. The APC-PCC also pointed to Atiku's previous support for fuel subsidy removal, recalling that he had described the old subsidy system as fraudulent while campaigning in 2022. Atiku should explain why he now advocates restoring subsidy in another form and how his proposed arrangement would avoid the abuse, scarcity, smuggling, and fiscal losses associated with the old system.
The APC-PCC noted that the Tinubu administration has focused on expanding Compressed Natural Gas (CNG) and electric mass transit as alternatives to reduce transportation costs. President Bola Tinubu recently remarked that more Nigerians would begin to experience lower transport costs from October 1 through the CNG programme. The council maintained that any intervention in the downstream petroleum sector must be lawful, transparent, and properly costed.
The APC-PCC urged Atiku to publish a detailed policy document and an independent legal and fiscal analysis of his proposal. Until he does so, his production-subsidy plan remains an uncosted promise without a clearly identified legal or operational framework. The council emphasized that Nigerians deserve a well-thought-out and transparent policy that addresses the country's energy needs.
The debate over Atiku's petrol subsidy plan highlights the complexities of Nigeria's fuel subsidy regime. The APC-PCC's concerns underscore the need for a thorough examination of the proposal's potential impact on the country's economy and energy sector. As the nation awaits Atiku's response to the council's questions, it remains to be seen how his plan will be received by Nigerians and whether it will gain traction in the lead-up to the elections.
Key points
- APC questions Atiku's petrol subsidy plan over lack of legal framework
- Atiku's plan may fail to reduce fuel prices for Nigerians
- The proposed subsidy could cost between N17 trillion and N21 trillion annually
