Atiku’s ‘Targeted Subsidy’ Plan Sparks Fresh Clash as Presidency Accuses Him of Policy U-Turns

• The Presidency has accused former Vice-President Atiku Abubakar of sending conflicting signals on petrol subsidy after three different positions emerged from his camp within one week.

• Atiku’s spokesman, Paul Ibe, initially said the former vice-president would restore petrol subsidy if elected president and eventually phase it out, but another aide, Phrank Shaibu, later described that explanation as unauthorised and misleading.

• Atiku subsequently reaffirmed that his position had not changed, saying he would introduce a “targeted subsidy” to ease the burden of rising petrol and transport costs and restore purchasing power to Nigerians.

• The Presidency, while defending President Bola Tinubu’s removal of petrol subsidy, challenged Atiku to explain the cost, beneficiaries, funding mechanism and exit conditions of his proposed subsidy, arguing that petrol prices are influenced by several factors beyond crude oil.

August 26, () — The Presidency has launched a fresh attack on the Presidential candidate of the African Democratic Congress (ADC ), Atiku Abubakar over his proposal to restore petrol subsidy, accusing the former Vice President of making contradictory policy pronouncements ahead of the 2027 general election.

The latest criticism followed a series of apparently conflicting explanations from Atiku and members of his political camp on whether a government led by him would restore petrol subsidy and, if so, under what conditions.

In a statement issued on Wednesday by the Special Adviser to President Bola Tinubu on Information and Strategy, Bayo Onanuga, the Presidency said the former vice-president had presented Nigerians with three different explanations of his proposed petrol subsidy policy within one week.

According to Onanuga, Atiku’s spokesperson, Paul Ibe, initially said the former vice-president would restore petrol subsidy if elected president and subsequently phase it out.

earlier reported that Ibe had presented the proposed intervention as a temporary measure designed to provide relief to Nigerians and businesses struggling with the effects of rising energy and transportation costs.

However, another senior aide Phrank Shaibu, subsequently rejected that interpretation, describing Ibe’s statement as an “unauthorised and misleading characterisation” of Atiku’s position.

Shaibu, according to the Presidency, argued that Atiku would not impose a predetermined date for ending subsidy.

Rather, the intervention would continue until domestic refining capacity increased, petroleum supply stabilised, competition deepened and market forces were capable of delivering affordable prices without government support.

But Atiku later intervened, saying his position had not changed and reaffirming his intention to restore what he described as a “targeted subsidy” if elected president.

“I will restore targeted subsidy and put purchasing power back in the hands of Nigerians,” Atiku was quoted as saying.

The Presidency said the development raised questions about the clarity and consistency of Atiku’s economic programme.

“This is not merely a matter of semantics. It is a serious policy contradiction,” Onanuga said.

He challenged Atiku to explain why one of his principal aides initially said the subsidy would be temporary and phased out, why another aide publicly disowned that position and proposed a market-condition-based framework, and why Atiku subsequently reaffirmed the original position.

“Nigerians deserve clarity, not policy by trial and error,” he said.

Presidency Challenges Atiku’s Subsidy Economics

Onanuga also questioned what he described as an oversimplification of the relationship between petrol prices and the broader cost-of-living crisis. He said while fuel and transportation costs undoubtedly affect food prices, petrol prices alone could not explain Nigeria’s food inflation.

According to him, agricultural productivity, insecurity, exchange rates, logistics, storage, flooding, agricultural input costs, money supply and other supply constraints also contribute significantly to the rising cost of food.

“Petrol prices alone have never caused food inflation. Nigerians experienced rising food prices even during the years when petrol subsidy was in place,” he said.

The presidential aide argued that any serious economic programme should therefore address the wider structural problems affecting production and distribution rather than reduce the cost-of-living crisis to the price of petrol.

He further defended the Tinubu administration’s economic reforms, claiming that the removal of petrol subsidy had significantly improved government revenues and helped restore fiscal stability to the three tiers of government.

The Presidency also sought to challenge the former vice-president’s argument that petrol subsidy could be tied to the price of crude oil.

Onanuga questioned whether Atiku’s proposed intervention adequately accounted for the different products obtained from a barrel of crude oil.

He said petrol accounts for only about 45 per cent of the products derived from a refined barrel of crude, while the remainder consists of products such as diesel, aviation fuel, kerosene, petrochemical feedstocks, asphalt, hydrocarbon gas liquids, lubricants, waxes, petroleum coke and sulphur.

“Will Atiku subsidise all these by-products of the barrel as well, since kerosene is used by the underprivileged to cook, and many homes and factories use diesel to power generators and delivery trucks?” Onanuga asked.

He also questioned whether refineries supplied with discounted crude would be allowed to retain the commercial value of the other products generated during refining while government support was concentrated on petrol.

The Presidency cited the deregulation of diesel under the administration in which Atiku served as vice-president as another reason it considered his current subsidy proposal deserving of further explanation.

Onanuga said diesel was deregulated in 2004, while kerosene and jet fuel were deregulated at different times, with subsidies eventually removed from kerosene.

He argued that if Atiku’s proposed subsidy was based on crude oil prices, the former vice-president needed to explain why government support should be concentrated on petrol rather than other petroleum products that also have significant effects on households, businesses and transportation.

Presidency Demands Costed Plan

The Presidency challenged Atiku to provide details of the proposed “targeted subsidy”, including its projected cost, beneficiaries, funding mechanism and conditions for termination.

“Either he has a coherent, costed, and workable petroleum policy, or he is simply playing Politics with a policy that has significantly restored fiscal health to the three tiers of government and stabilised the macroeconomic environment,” Onanuga said.

Background

The statement comes against the backdrop of the continuing political and economic debate over the removal of petrol subsidy by the Tinubu administration.

Tinubu announced the end of the petrol subsidy regime during his inauguration on May 29, 2023, declaring that “subsidy is gone” as part of a broader programme of economic reforms.

The decision immediately triggered a sharp increase in petrol prices and contributed to higher transportation and living costs, although the government has consistently maintained that the subsidy regime was fiscally unsustainable and vulnerable to corruption and inefficiency.

The administration has since introduced various measures aimed at cushioning the effects of the reforms, while investing in domestic refining capacity and promoting local production as a long-term solution to Nigeria’s dependence on imported petroleum products.

The commencement of operations by the Dangote Petroleum Refinery and efforts to revive government-owned refineries have also become central to the government’s argument that Nigeria can eventually achieve greater domestic supply and reduce exposure to international petroleum market volatility.

Atiku’s call for a targeted subsidy has nevertheless reopened one of the most politically sensitive economic debates in Nigeria.

Supporters of subsidy restoration argue that government intervention is necessary to protect households and businesses from the immediate consequences of high petrol prices, particularly because transportation and energy costs feed directly into the prices of food and other essential commodities.

Critics, including the Tinubu administration, contend that a broad subsidy regime places an unsustainable burden on public finances and can divert resources that could otherwise be invested in infrastructure, health, education and productive sectors of the economy.

For the Presidency, Atiku must now provide clear answers before Nigerians can assess the viability of his proposal.

Onanuga said the former vice-president should stop “shifting positions” and explain exactly what he means by targeted subsidy.

“The economy is too serious for policy somersaults, incoherence, destructive populism and election gimmicks,” he said.

The renewed exchange is likely to intensify the emerging economic policy contest ahead of the 2027 presidential election, with the future of petrol pricing, subsidy, domestic refining and the broader direction of Nigeria’s economic reforms expected to remain major campaign issues.