By Mary Izuaka

 

The All Progressives Congress Presidential Campaign Council (APC-PCC) has asked former Vice President Atiku Abubakar to explain the legal and fiscal basis for his proposed “production subsidy” for locally refined petrol.

Mr Atiku, at a press conference in Abuja on Friday, reiterated his proposal for a production subsidy to reduce pump prices and asked President Bola Tinubu to slash the cost of diesel and petrol at the pump.

In a statement on Sunday, the spokesperson of the APC-PCC, Dele Alake, said the proposal raises legal, fiscal and practical questions that Mr Atiku must answer.

Mr Alake, who is also the Minister of Solid Minerals Development, cited Section 205(1) of the Petroleum Industry Act 2021, which provides that unrestricted free-market conditions shall determine wholesale and retail prices of petroleum products.

He noted that the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), in a statement on Saturday, explained that it neither fixes pump prices nor issues administrative price templates, except where statutory conditions for intervention are met.

“At the moment, ‘No such market failure has been declared,’ NMDPRA said,” Mr Alake said.

Mr Alake therefore asked Atiku to clarify whether a refinery receiving his proposed subsidy would be required to sell petrol at a prescribed price.

“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.

“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,” the statement said.

The council also asked Mr Atiku to disclose the cost of his proposal and how he would fund it, noting that his earlier statement suggested the intervention could take the form of preferentially priced crude for domestic refineries.

“Any discount on crude would reduce the value accruing to the federation and, consequently, the revenue available to the federal, state and local governments, triggering afresh the fiscal crisis that made 27 states unable to pay salaries and pensions before President Tinubu assumed office in 2023,” Mr Alake said.

He said 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, volume covered, and whether the support applies to the entire barrel or only to petrol sold domestically.

The APC-PCC listed seven clarifications Nigerians deserve to know, including the proposed subsidy rate, annual spending ceiling, volume of crude or petrol to be covered, source of funding, mechanism guaranteeing lower pump prices, safeguards against diversion, smuggling and fraudulent claims, and whether amendments to the PIA would be required.

“An appropriation by the National Assembly may authorise expenditure, but it would not by itself resolve every regulatory question arising under the Petroleum Industry Act. If Atiku intends to amend the law, he should say so plainly,” it said.

The council said Atiku’s latest position must be reconciled with his previous support for downstream deregulation, recalling that in November 2022 at the Lagos Business School, he described the petrol subsidy system as fraudulent and pledged to complete its removal.

It noted that deregulation of diesel and aviation fuel began under the Obasanjo-Atiku administration in June 2003, kerosene under the Buhari administration in 2016, while petrol was the last major product retained under the old regime, scheduled to end in June 2023 under the PIA.

“Nigeria spent about two decades developing the PIA. The reform process began in 2000, during the first term of the administration in which Atiku served as Vice President. He should therefore explain how his new proposal aligns with the legal and regulatory framework that emerged from that process,” Mr Alake said.

The APC-PCC said the Tinubu administration has instead focused on expanding lower-cost alternatives through compressed natural gas and electric mass transit.

It said the government has converted more than 120,000 vehicles to Compressed Natural Gas (CNG), and that commuters in seven states and the Federal Capital Territory are already paying between 31 and 83 per cent less on routes served by CNG and electric buses.

“From October 1, more Nigerians should begin to see measurable reductions in transportation costs,” President Tinubu was quoted as saying in the statement, referencing a programme agreed with governors of the 36 states on August 27.

The statement cited examples including Borno State, where services charge between N50 and N100 on routes where commercial operators charge between N300 and N600; the Suleja–Abuja service in Niger State, where passengers pay N550 instead of about N800; and Kaduna, where free CNG buses carried more than 1.4 million passengers in five months of 2025, saving residents an estimated N1.39 billion in fares.

It added that alternative-energy transport in Adamawa has reduced fares by as much as 50 per cent, while Abia has deployed 40 electric buses and 20 charging stations.

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“In contrast, Atiku is reaching into Nigeria’s past with another subsidy scheme that will enrich smugglers in particular. He has yet to tell Nigerians what it will cost or under what law it will operate,” Mr Alake said.

He said Nigeria will continue with a deregulated market that has supported increased investment in domestic refining, noting that the Dangote Petroleum Refinery has reached its nameplate capacity of 650,000 barrels per day and reportedly achieved 700,000 barrels per day during performance tests.

“The APC-PCC acknowledges the pressure that higher petrol prices place on Nigerian families. The Tinubu administration will continue to implement policies to support our people,” he said, adding that NMDPRA is working with the Federal Competition and Consumer Protection Commission (FCCPC) against price-gouging and with the Nigeria Customs Service against diversion of petroleum products.

“Atiku should provide Nigerians with a detailed policy document and an independent legal and fiscal analysis of his proposal. Until he does so, his production-subsidy plan remains an uncosted promise without a clearly identified legal or operational framework,” the statement said.