2027: Explain how fuel subsidy plan will work, APC tells Atiku

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The All Progressives Congress Presidential Campaign Council has asked the presidential candidate of the African Democratic Congress, Atiku Abubakar, to explain the legal and fiscal basis of his proposed production subsidy for locally refined petrol.

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The APC-PCC said Atiku should explain how the proposal would operate under the Petroleum Industry Act 2021 and how the government would fund the intervention.

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In a statement issued on Sunday, the council’s spokesman, Dele Alake, said the proposal raised “important legal, fiscal and practical questions” that Atiku needed to answer.

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The statement followed Atiku’s call on President Bola Tinubu on Friday to reduce petrol and diesel prices and his proposal for a production subsidy for locally refined petroleum products as a way of lowering pump prices.

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Alake cited Section 205(1) of the PIA, which provides that wholesale and retail prices of petroleum products shall be based on unrestricted free-market pricing conditions.

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The Nigerian Midstream and Downstream Petroleum Regulatory Authority also said on Saturday that it does not fix petrol pump prices or issue administrative pricing templates, except where the statutory conditions for intervention are met.n

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The regulator said no market failure had been declared.

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The APC-PCC spokesman therefore asked Atiku to explain whether a refinery receiving the proposed subsidy would be required to sell petrol at a prescribed price.

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“If the answer is yes, 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.

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“If the answer is no, he should explain how public support to refiners would guarantee lower prices at filling stations. Without an enforceable mechanism, refiners could receive the benefit while consumers continued to pay market prices,” Alake said.

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He also challenged Atiku to disclose the cost of the proposal and how it would be funded.

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The APC-PCC said the ADC presidential candidate had previously suggested that the intervention could take the form of preferentially priced crude for domestic refineries, arguing that any discount would reduce the value accruing to the Federation and, consequently, revenue available to the federal, state and local governments.

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“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, depending on the discount size, the volume covered, and whether the support applies to the entire barrel or only to petrol sold domestically.

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“These assumptions must be clearly defined. Nigerians deserve to know: the proposed subsidy rate; the annual spending ceiling; the volume of crude or petrol to be covered; the source of funding; the mechanism guaranteeing lower pump prices; the safeguards against diversion, smuggling and fraudulent claims; and whether amendments to the Petroleum Industry Act would be required,” the statement said.

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Alake also questioned Atiku’s current position in relation to his previous support for downstream deregulation.

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He recalled that Atiku, while speaking at the Lagos Business School in November 2022, described the petrol subsidy system as fraudulent and pledged to complete its removal.

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The APC-PCC spokesman also referred to Atiku’s August 25, 2026 post on X, in which the former vice president said, “I will restore it!”

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“He must 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,” Alake said.

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The statement also recalled the deregulation of diesel in June 2003 and aviation fuel under the administration of former President Olusegun Obasanjo, in which Atiku served as vice president.

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It said petrol was the last major petroleum product retained under the old subsidy regime, which was scheduled to end in June 2023 under the PIA.

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The APC-PCC said the reform process that culminated in the PIA began in 2000, during Atiku’s first term as vice president, and challenged him to explain how his new proposal aligned with the current legal and regulatory framework.

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The council contrasted Atiku’s proposal with the Tinubu administration’s focus on compressed natural gas and electric mass transit as alternatives aimed at reducing transportation costs.

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It said more than 120,000 vehicles had been converted to CNG, while programmes involving CNG and electric buses had reduced fares on some routes.

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Quoting a statement by Tinubu on Saturday, Alake said the President had told governors on August 27 that, “From October 1, more Nigerians should begin to see measurable reductions in transportation costs.”

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The statement also cited examples from Borno, Niger, Kaduna, Adamawa and Abia states to support its claim about reduced transport costs.

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However, the APC-PCC criticised Atiku’s proposal, saying, “In contrast, Atiku is reaching into Nigeria’s past with another subsidy scheme that will enrich smugglers in particular.”

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The council also said the government would continue with a deregulated downstream market, which it said had supported increased investment in domestic refining.

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It cited the Dangote Petroleum Refinery, saying the facility had reached its nameplate capacity of 650,000 barrels per day and reportedly achieved 700,000 barrels per day during performance tests. Recent reports put the refinery’s current operating capacity at about 700,000 barrels per day and its planned IPO at about N2.15tn.

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The APC-PCC acknowledged the pressure caused by higher petrol prices and said the Tinubu administration would continue to implement policies to support Nigerians.

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“Petrol sold for about ₦830 per litre before the Middle East crisis pushed crude oil prices above $100 per barrel. A de-escalation of the crisis could help reduce crude oil prices and, consequently, the pump prices of petrol and diesel, not just in Nigeria, but worldwide,” the statement said.

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It added that the NMDPRA was working with the Federal Competition and Consumer Protection Commission against price-gouging and with the Nigeria Customs Service against the diversion of petroleum products across Nigeria’s borders.

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The APC-PCC called on Atiku to provide a detailed policy document and an independent legal and fiscal analysis of his proposal.

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“Until he does so, his production-subsidy plan remains an uncosted promise without a clearly identified legal or operational framework,” Alake said.

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He also urged Atiku to read the PIA, adding that he appeared “out of touch with reality and the oil sector’s current dynamics.”

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