Nkem Okereh 

The Presidency in a swift response to Atiku’s subsidy policy proposal asked the ADC presidential candidate to  present Nigerians with the full fiscal and legal implications of his proposal to restore fuel subsidy.

Dissecting Atiku’s economic plans should he be elected as President by January next year, the Presidency said his proposal depicts political desperation.

The Federal Government in a statement yesterday by Bayo Onanuga, Special Adviser to the President (Information and Strategy), faulted Atiku for to announce a more creative and ingenious alternative to the programme being executed by the Tinubu administration. 

“Atiku Abubakar behaved like a man from an archaic past who least comprehends the present economic dynamics and suggested that he would restore the much-abused, wasteful, pillaged, corruption-ridden fuel subsidy regime, which the Petroleum Industry Act made illegal from the end of June, 2023. 

“Even though he used to believe that the subsidy regime must be eliminated, a point he canvassed in the run-up to his defeat in the  2023 election,  he has now opportunistically recanted the major plank of his economic doctrine and turned a renegade. 

“It is not difficult to explain why Atiku has latched onto the abandoned subsidy regime, five months to the election. Desperate for power, he needed to make a promise that he knew, if he were candid with our people, does not make fiscal sense, is retrogressive, and is against the genuine interest of the people. 

“But before his suggestion hoodwinks the people, we must quickly subject the promise to a serious examination, especially in the context of Nigeria’s present economic and petroleum realities,” said the Presidency.

Atiku was told that Nigerians  deserve to understand what the proposed restoration of subsidy would actually mean, how it would be funded, and whether it is compatible with the legal and structural changes that have taken place in the petroleum sector.

Clearing what it termed as  ambiguities about the so-called subsidy, the Presidency said “It is not some money sitting in the treasury to be disbursed to offer cheap fuel to Nigerians. It is the massive discount the NNPC offered the Nigerian government: selling fuel it bought at N100 at N50 at the pump, leading to under-recovery of costs and massive losses. 

“Somewhere in the NNPC books are still trillions of Naira in subsidy costs that the Nigerian government has not paid. Contrary to Atiku’s claim in his interview, no N30 trillion subsidy windfall or savings exists anywhere except in his imagination.

 “The petrol subsidy regime that Nigerians knew before May 2023 was dismantled as part of the country’s petroleum-sector reforms. The Petroleum Industry Act established a new framework for the downstream petroleum market. It removed the subsidy, as was previously done for diesel, kerosene and aviation fuel, ending a system that had placed a substantial and often unpredictable burden on public finances. 

“The PIA scheduled the subsidy removal by the end of June 2023. President Tinubu only accelerated it by weeks to stop further bleeding before the due date.

 “Restoring the old arrangement therefore cannot simply be presented as a matter of announcing that government will once again pay part of the cost of petrol. It would require a clear legal, fiscal and administrative framework, including identifying the source of the funds and determining how such a policy would be implemented under the present petroleum-market structure.

 “More importantly, Nigeria’s petroleum landscape has changed significantly since May 2023. For many years, the country relied heavily on imported petrol, with the government bearing the consequences of the gap between the regulated pump price and the cost of supplying the product. 

“Today, the emergence of substantial domestic refining capacity has fundamentally altered that equation. The Dangote Refinery has become a major source of locally refined petrol. Indeed, the Dangote Refinery would not have kick-started production for local consumption were the subsidy regime operative.  This is an important point that Atiku deceptively ignored.” 

 The government further said that Atiku’s proposal portends a reversal of current local production, and it will spell bankruptcy for smaller local refineries like Aradel’s, causing attendant job losses and a loss of foreign exchange. 

Reeling out the gains of subsidy removal by the Tinubu administration, the Presidency said “the sector is now market-driven, Nigeria now exports refined products to Europe, Asia, and the United States, restoring national pride. This development is a sharp contrast to when Obasanjo and Atiku were in power: Nigeria’s largest import, costing about $10 billion, was refined products!. President Tinubu has flipped that to Nigeria’s advantage.

 “The N15 trillion that would have been borrowed and spent on selling discounted petrol has now significantly gone into the coffers of the three tiers of government. Now all states are fiscally stable and can pay salaries regularly and embark on infrastructure projects. In July, the three tiers shared about N3 trillion, a record, from the federation account. That is a major achievement, since the abolition of petrol price discount and distortions in the foreign exchange regime. 

 “Nigeria is increasingly moving from a model in which scarce foreign exchange is used to import refined petrol to one in which crude oil, largely sold in Naira, can be processed domestically and supplied to the Nigerian market. That transition creates opportunities for greater energy security, foreign-exchange conservation, industrial development and ultimately a boost to employment generation.”

 It added that the subsidy debate must therefore be grounded in the realities of today’s market rather than treated as though Nigeria’s petroleum sector has remained unchanged.