The Presidency has rejected former Vice-President Atiku Abubakar‘s proposed petrol production subsidy, arguing that Nigeria lacks sufficient uncommitted crude oil volumes to sustain the arrangement without exposing public finances to fresh risks.
President Bola Tinubu’s Special Adviser on Media and Public Communications, Sunday Dare, stated the position in a statement released on Sunday, titled Atiku’s Demagoguery in the Face of Tinubu’s Logical Policies.
Dare argued that Nigeria’s total crude oil production should not be confused with the volume available to the Federal Government after contractual obligations and production costs are deducted.
The dispute follows Atiku’s criticism of the Federal Government’s 30-day petrol discount at Nigerian National Petroleum Company Limited (NNPC) retail outlets and its proposed framework for moderating fuel price fluctuations.
Atiku, the African Democratic Congress presidential candidate, described the initiative as a temporary measure that would offer little lasting relief to Nigerians struggling with rising transport and living costs.
He also argued that the government had adopted elements of his proposal for supporting locally refined petrol without implementing the production subsidy he advocated.
Dare countered that Nigeria produces approximately 1.8 million barrels of crude oil daily but does not own all the output outright.
According to him, joint ventures and production-sharing contracts mean that production expenses, royalties and contractual arrangements reduce the quantity of crude available directly to the government.
He cited Finance Minister Taiwo Oyedele’s recent explanation that Nigeria has fewer than 700,000 barrels of freely available crude daily to allocate, including to domestic refiners.
Dare argued that introducing a production subsidy without establishing the actual volume available to support it could recreate the financial and administrative problems associated with Nigeria’s former petrol subsidy regime.
He also maintained that the country’s crude supply constraints complicate efforts to meet domestic refining demand. Although local refining capacity has expanded, domestic refiners still face challenges securing sufficient Nigerian crude under existing supply arrangements.
The Presidency therefore questioned how Atiku’s proposed arrangement would be funded and administered without creating additional fiscal obligations or opportunities for abuse.
On the current petrol discount, Dare insisted that the government had not restored the former subsidy programme.
NNPC Limited announced on October 9 that its retail discount, initially introduced on October 1 to mark Nigeria’s 66th Independence anniversary, would continue until October 31.
The company said it was foregoing its retail profit margin to provide temporary relief amid elevated global crude oil prices.
The Presidency said the arrangement was intended to cushion consumers against short-term price shocks rather than introduce a permanent government-funded reduction in petrol prices.
The Federal Government has also proposed a negotiated ceiling of N1,350 per litre on ex-gantry costs, under which refiners and importers would absorb some immediate cost increases and potentially recover them when market conditions improve.
Dare described the framework as a mechanism for moderating price volatility, arguing that more predictable fuel prices could help households and businesses plan their expenditure.
He also listed compressed natural gas adoption, strategic energy reserves, crude supply arrangements for domestic refineries and targeted support measures among the administration’s proposed responses to rising energy costs.
The Presidency maintained that the removal of petrol subsidy and the unification of the foreign exchange market had helped reduce longstanding fiscal pressures. However, the government continues to face public criticism over petrol prices and their effects on transportation, food costs and household budgets.
Atiku’s central objection is that a temporary discount cannot replace a lasting policy that supports domestic refining and reduces costs for consumers.
The disagreement has consequently expanded beyond the immediate discount to questions about how Nigeria can secure affordable fuel, sustain local refining and protect public finances as the 2027 elections approach.
