The Presidency has criticised former Vice President Atiku Abubakar’s proposal to restore petrol subsidy, describing it as a politically motivated policy reversal that could undermine ongoing reforms in Nigeria’s petroleum sector.
In a statement, Special Adviser to the President on Information and Strategy, Bayo Onanuga, said Atiku’s proposal represented a departure from the former vice president’s earlier position that the subsidy regime should be dismantled.
Onanuga argued that restoring the subsidy would be fiscally unsustainable and inconsistent with the structural changes that have taken place in the downstream petroleum sector since 2023.
According to him, Atiku had previously advocated the removal of petrol subsidy but had now changed position ahead of the 2027 general election.
The presidential aide said Nigerians were entitled to alternative economic policies but insisted that any proposal to restore subsidy must clearly explain its legal basis, funding mechanism and long-term fiscal implications.
He argued that the former subsidy regime was not simply a government discount but a system under which the state absorbed the difference between the cost of supplying petrol and its regulated pump price, creating substantial financial liabilities.
Onanuga disputed claims that the federal government had accumulated or saved about N30 trillion from subsidy removal, describing the figure as unsupported.
He said the Petroleum Industry Act (PIA) had provided for the end of the petrol subsidy regime by June 2023, adding that President Bola Tinubu’s decision to remove it earlier was intended to halt further losses.
The presidential aide maintained that reinstating subsidy would require more than a presidential announcement, arguing that it would involve establishing a fresh legal, fiscal and administrative framework for funding and administering the scheme.
He also said Nigeria’s petroleum industry had changed significantly since the subsidy was removed, particularly with the emergence of large-scale domestic refining capacity.
Onanuga cited the Dangote Refinery as a major development that had altered the country’s dependence on imported petrol and created opportunities for domestic refining, foreign-exchange conservation and energy security.
He argued that returning to a subsidised market could weaken the viability of smaller domestic refineries and reverse progress towards a market-driven downstream petroleum sector.
According to him, the removal of petrol subsidy, combined with reforms in the foreign-exchange market, had increased revenues available to the three tiers of government.
He cited the approximately N3 trillion shared among the federal, state and local governments from the Federation Account in July as evidence of improved fiscal flows following the reforms.
The Presidency further argued that Nigeria was gradually transitioning from an economy heavily dependent on imported refined petroleum products to one capable of processing crude oil domestically and supplying the local market.
Onanuga said the transition could generate opportunities for industrial development, employment creation and improved energy security if sustained.
He acknowledged, however, that the removal of subsidy had imposed significant pressure on households and businesses through higher petrol, transportation and energy costs.
The administration, he said, was pursuing alternative measures to reduce the burden, including promoting Compressed Natural Gas (CNG), which he described as significantly cheaper than petrol for vehicles and commercial transportation.
He said the use of CNG by major companies, including Dangote and BUA, demonstrated the potential of alternative fuels to reduce operating costs.
The presidential aide challenged Atiku and other political actors advocating a return to subsidy to explain how such a programme would be financed.
He asked whether the government would borrow to fund the subsidy, amend existing provisions of the Petroleum Industry Act, or divert resources from infrastructure, social services and allocations to state and local governments.
He also questioned what precisely would be subsidised under a renewed scheme, given Nigeria’s growing domestic petrol production.
“Political promises must be backed by fiscal arithmetic,” Onanuga said, insisting that Nigerians deserved to know the annual cost, revenue source, legal framework and safeguards against corruption associated with any proposed subsidy regime.
He warned that Nigeria could not afford to return to a system whose financial costs were obscured until they resurfaced as public debt, reduced government spending and pressure on the naira.
The Presidency said the debate over the cost of living and economic policy was legitimate but should reflect the realities of Nigeria’s current petroleum market rather than the conditions that prevailed before the sector’s reforms.
It urged all political actors, including Atiku, to present Nigerians with the full fiscal and legal implications of any proposal to restore petrol subsidy.
