Atiku's Fuel Subsidy Plan is Unrealistic, Says Presidency

Reported by Ariajegbe Sylvia Esezobor 

The Presidency on Sunday dismissed former Vice President Atiku Abubakar's proposed production subsidy on petrol as "a dangerous mathematical fantasy wrapped in political deceit," saying Nigeria does not have the crude oil volumes to fund it and warning that implementing the plan would revive the opacity and fiscal haemorrhage that crippled the country for decades under the old subsidy regime.

Special Adviser to the President on Media and Public Communications, Sunday Dare, stated this in a statement titled "Atiku's Demagoguery in the Face of Tinubu's Logical Policies," describing the recent press conference in Abuja by the African Democratic Congress presidential candidate as "a seminal example of shallow, election-laced demagoguery." Atiku had criticised the 30-day discount on petrol by NNPC Retail and the government's price modulation framework, which he described as a "panic-driven gimmick," and had claimed that President Bola Tinubu copied his economic homework without the production subsidy that made it work.

At the heart of the Presidency's argument is a simple arithmetic claim: Nigeria does not own all the crude it produces. Citing the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, Dare said Nigeria produces about 1.8 million barrels of crude per day for a population of over 200 million. However, the Presidency said the Federal Government does not directly own all of that oil. It argued that under joint ventures and production-sharing contracts signed over decades, production costs, royalties and profit-oil sharing ratios "severely reduce the equity crude available to the state," leaving fewer than 700,000 barrels per day of unencumbered free crude. "To propose a blanket 'targeted production subsidy' on crude without the physical, unencumbered volume to back it up is pure economic illiteracy," Dare said. "It invites the very opacity, fraudulent round-tripping, and fiscal haemorrhage that crippled Nigeria for decades under the old subsidy regime."

The Presidency further noted that refineries such as the Dangote Petroleum Refinery need more feedstock than the state can freely supply without breaching international supply contracts, which is why Dangote and other domestic refiners also import crude. It rejected Atiku's comparison of crude allocation with farm produce like garri or cassava, saying it misrepresented commodity markets. It also pointed to the United States, which it said produces over 10 million barrels per day for 330 million people but sells petroleum at market prices, and to Qatar, which it said had to cut energy subsidies significantly despite its large gas reserves and a population of under 500,000. "Atiku's soundbite-driven critique relies on emotional bait, trying to buy future votes with cheap sentimental appeals while ignoring the structural rot that President Tinubu's administration has systematically dismantled over the last three years," the statement added.

On the NNPC Retail discount, the Presidency rejected Atiku's claim that it amounted to a return to subsidy. It said NNPC had offered the discount to mark Nigeria's 66th Independence anniversary and had now offered to extend it by another 30 days. "When NNPC Retail agrees to sell fuel at landing cost for 30 days during an unprecedented global crude price spike, it is not writing cheques to opaque import cartels," Dare stated. "It is leveraging its corporate balance sheet to absorb short-term global volatility, backed directly by President Bola Ahmed Tinubu." He said the negotiated interim ceiling of N1,350 per litre on ex-gantry costs was "a structural shock absorber, not price control." Under it, refiners and importers absorb short-term cost spikes above the ceiling and recover them later when crude prices cool or the exchange rate adjusts, with the ceiling reviewed monthly based on published cost audits. "N1,400 today and N1,400 tomorrow provides far greater economic stability than N1,500 today and N1,300 tomorrow," Dare said, adding that erratic fuel prices trigger transport fare hikes that rarely fall back.

The Presidency listed other measures the administration had taken, including a state-backed strategic energy reserve, a rapid rollout of compressed natural gas, which it said is 60 to 70 per cent cheaper than petrol, and the naira-for-crude arrangement with domestic refiners. It also rejected Atiku's characterisation of the government's petrol price measures as lacking substance, arguing that the administration had chosen "the hard, courageous, and necessary path" by coupling market deregulation with targeted price-smoothing mechanisms. "The Nigerian electorate is far too sophisticated to trade long-term national economic security for Atiku's shallow, short-term demagoguery," the statement read.

The exchange represents the latest escalation in the policy confrontation between the ruling All Progressives Congress and the opposition ahead of the 2027 general elections, scheduled for January 16, with the governorship and state assembly elections following on February 6. Atiku, who is seeking the presidency on the ADC platform with former Rivers State Governor Rotimi Amaechi as his running mate, has made the cost of living and fuel prices central to his campaign, arguing that a capped, budgeted production subsidy tied to locally refined petrol would lower pump prices without returning to the discredited import-subsidy regime. His proposal would involve supplying crude to domestic refiners at a discounted price, with support tied to fuel refined in Nigeria and subject to independent auditing. The Presidency's response signals that the ruling party intends to subject that proposal to sustained scrutiny, framing it as legally questionable, fiscally reckless and inconsistent with the realities of Nigeria's crude supply architecture.

The ADC has consistently rejected the Presidency's characterisation of Atiku's plan. In August 2026, the party dismissed the government's claim that a petrol subsidy supporting a pump price of about N600 per litre would cost N19.1 trillion annually, insisting that the proposal was financially sustainable and fundamentally different from the previous subsidy regime. The party has argued that the Presidency's estimates are based on assumptions that do not reflect the structure of Atiku's production subsidy, and that the plan would stimulate domestic refining, create jobs and reduce the country's dependence on imported petroleum products.

For Nigerians, the debate over subsidy, crude supply and fuel prices is not abstract. It determines the cost of transportation, the price of food and the viability of small businesses. The government's argument is that removing the subsidy was necessary to prevent a fiscal collapse and that the savings are now funding infrastructure, wages and social transfers. Its critics argue that the benefits have not reached ordinary households and that the reforms have deepened hardship. As the 2027 campaign intensifies, the contest over the subsidy question will remain at the centre of the political conversation, and the Presidency's latest intervention has placed its position firmly on the record. Whether Atiku's plan is economically viable or, as the Presidency contends, a mathematical fantasy, will ultimately be decided not by press statements but by the judgment of voters at the polls.

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