By Opeyemi Adelakun
The Presidency has rejected former Vice-President Atiku Abubakar’s proposed production subsidy on petrol, arguing that Nigeria lacks sufficient freely available crude oil to sustain the policy.
Special Adviser to the President on Media and Public Communications, Sunday Dare, made the position known in a statement issued on Sunday, titled Atiku’s Demagoguery in the Face of Tinubu’s Logical Policies.
Dare criticised Atiku, the African Democratic Congress presidential candidate, over his recent press conference in Abuja, where he reportedly faulted the 30-day petrol discount offered by NNPC Retail and the government’s price modulation framework.
Atiku had described the measures as a panic-driven gimmick and accused President Bola Tinubu of adopting his economic proposals without incorporating the production subsidy he considered essential.
However, the Presidency maintained that the proposal was impracticable because Nigeria does not have unrestricted access to all the crude oil it produces.
Citing Finance Minister and Coordinating Minister of the Economy, Taiwo Oyedele, Dare said Nigeria produces approximately 1.8 million barrels of crude oil daily for a population exceeding 200 million.
He argued that joint venture agreements and production-sharing contracts, alongside production costs, royalties and profit-sharing arrangements, substantially reduce the volume available for direct government use.
According to him, the Federal Government has fewer than 700,000 barrels per day of unencumbered crude oil at its disposal.
Dare described the proposed production subsidy as economically unsustainable, warning that implementing it without adequate crude supplies could revive the opacity, fraudulent transactions and financial losses associated with the former petrol subsidy system.
He also argued that domestic refineries, including the Dangote Petroleum Refinery, require substantial crude supplies, adding that existing contractual obligations limit the quantity the government can freely allocate.
The Presidency further rejected comparisons between crude oil allocation and agricultural commodities such as garri and cassava, insisting that crude oil markets operate under different commercial and contractual arrangements.
To support its position, Dare cited the United States, which he said produces more than 10 million barrels of crude oil daily but sells petroleum products at market prices. He also referenced Qatar’s reduction of energy subsidies despite its substantial gas reserves.
On the NNPC Retail discount, the Presidency maintained that the arrangement did not amount to a return to the abolished petrol subsidy regime.
Dare said the discount was introduced to mark Nigeria’s 66th Independence anniversary, with NNPC Retail subsequently offering to extend it for another 30 days.
He explained that the arrangement allows NNPC Retail to absorb short-term market pressures through its corporate balance sheet rather than rely on payments to fuel importers under an opaque subsidy structure.
The Presidency also defended the negotiated interim ceiling of ₦1,350 per litre on ex-gantry costs, describing it as a mechanism for cushioning sudden price increases rather than imposing permanent price controls.
Under the arrangement, refiners and importers absorb cost increases above the ceiling in the short term, with the possibility of recovering them when crude prices decline or exchange-rate conditions improve. The ceiling is reviewed monthly using published cost audits, the statement said.
Dare argued that maintaining relatively stable petrol prices would help limit repeated increases in transport fares, which often remain high even after fuel prices fall.
He listed other measures introduced by the administration, including a strategic energy reserve, the expansion of compressed natural gas infrastructure, naira-for-crude arrangements for domestic refineries, windfall taxes on energy operators and enforcement of the 2025 tax reform laws.
According to him, compressed natural gas offers savings of between 60 and 70 per cent compared with petrol, while proceeds from the proposed windfall tax measures are intended to support transport vouchers and minimum-wage assistance.
The Presidency also credited the removal of petrol subsidy and the unification of the exchange rate with ending what it described as a multi-trillion-naira drain on public finances.
Dare said the resulting funds now flow to state and local governments through Federation Account Allocation Committee distributions. He also claimed that fuel queues had been eliminated and the gap between the official and parallel foreign exchange markets had closed.
Responding to Atiku’s reported description of Tinubu as a “dull student”, Dare questioned the former vice-president’s remarks, contrasting his educational background with the President’s accounting qualification.
He added that Nigerians should reject what he characterised as short-term political arguments in favour of policies intended to protect the country’s long-term economic stability.
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