NEWS
‘Production Subsidy’ Proposal Will Bankrupt Nigeria – Presidency Slams Atiku, Defends 30-Day Petrol Discount
‘Production Subsidy’ Proposal Will Bankrupt Nigeria – Presidency Slams Atiku, Defends 30-Day Petrol Discount
Presidency rejects Atiku Abubakar’s proposed “production subsidy”, warning it could reopen the fiscal leakages and abuses associated with Nigeria’s old subsidy regime.
Sunday Dare says Nigeria produces about 1.8 million barrels of crude daily but has fewer than 700,000 barrels of unencumbered crude after contractual and statutory obligations.
Presidency insists NNPC Retail’s 30-day petrol discount is a temporary price-modulation measure, not a restoration of the abolished fuel subsidy.
Tinubu administration says CNG expansion, domestic refining, strategic energy reserves and other reforms offer a more sustainable response to high energy and transportation costs.
October 12, () – The Presidency has launched a blistering attack on presidential candidate of the African Democratic Congress (ADC), former Vice President Atiku Abubakar over his criticism of the Federal Government’s latest intervention in petrol pricing, warning that his proposed “production subsidy” could bankrupt Nigeria and return the country to the fiscal haemorrhage associated with the old subsidy regime.
Special Adviser to the President on Media and Public Communications, Sunday Dare, asserted on Sunday in response to Atiku’s criticism of NNPC Retail’s 30-day petrol price discount and the Federal Government’s price-modulation framework.
Atiku had described the intervention as a “panic-driven gimmick” and accused President Bola Tinubu of adopting elements of his economic proposals while leaving out what he described as the crucial component — a targeted production subsidy.
Every second brings Nigerians closer to exercising their democratic right and shaping the future of our nation.
Exercise your democratic right responsibly, peacefully and lawfully.
But Dare dismissed the criticism as politically motivated, accusing the former Vice President of exploiting the economic difficulties facing Nigerians in an attempt to score political points.
He argued that Atiku’s proposal ignored the realities of Nigeria’s crude oil production, particularly contractual obligations that substantially reduce the volume of crude directly available to the Federal Government.
Channel
“Calling a calibrated, multi-layered economic stabilisation strategy a ‘panic-driven gimmick’ reveals more than partisan bitterness; it exposes a profound, structural ignorance of global energy dynamics, fiscal mechanics, and the plain arithmetic of modern Nigeria,” Dare said.
According to the presidential aide, Nigeria currently produces about 1.8 million barrels of crude oil per day for a population exceeding 200 million, but the entire production cannot be treated as crude freely owned and disposable by the Federal Government.
Citing figures attributed to Coordinating Minister of the Economy and Minister of Finance, Taiwo Oyedele, Dare said production costs, royalties and profit-sharing arrangements under Joint Ventures and Production Sharing Contracts substantially reduce the government’s equity crude.
He said that after statutory and contractual obligations are taken into account, the country has fewer than 700,000 barrels per day of what he described as unencumbered “free crude.”
The Presidency argued that this volume was insufficient to simultaneously meet all government commitments and provide the quantity required by large domestic refineries at heavily subsidised prices.
Dare noted that mega-refineries, including the Dangote Petroleum Refinery, require substantial daily crude feedstock and may consequently have to supplement domestic supplies with imports from international markets.
Against this background, he described Atiku’s call for a production subsidy as economically unsustainable.
“To propose a blanket ‘targeted production subsidy’ on crude without the physical, unencumbered volume to back it up is pure economic illiteracy,” he said.
According to Dare, such a policy could recreate the opacity, round-tripping and huge fiscal losses that characterised Nigeria’s previous petrol subsidy arrangement.
He also rejected comparisons between domestically produced crude and agricultural commodities such as cassava or garri, arguing that crude oil operates within complex international markets and contractual frameworks.
The presidential adviser maintained that the Federal Government could not simply allocate Nigeria’s entire crude production to domestic refiners at discounted prices without consequences for government revenues and existing contractual commitments.
Presidency Defends 30-Day Petrol Discount
Dare also rejected Atiku’s claim that NNPC Retail’s temporary petrol discount amounted to the return of fuel subsidy through the back door.
He said NNPC initially introduced the discount in connection with Nigeria’s 66th Independence anniversary before deciding to extend the relief for another 30 days.
According to him, the intervention represents temporary price modulation rather than the restoration of an open-ended subsidy funded directly from the Federation Account.
The Presidency said NNPC Retail would temporarily forgo its profit margin and sell petrol at cost as part of efforts to cushion consumers from sharp movements in international energy prices.
“When NNPC Retail agrees to sell fuel at landing cost for 30 days during an unprecedented global crude price spike, it is not writing checks to opaque import cartels. It is leveraging its corporate balance sheet to absorb short-term global volatility, backed directly by President Bola Ahmed Tinubu,” Dare said.
The Presidency also defended what Dare described as an interim ₦1,350-per-litre ceiling on ex-gantry costs, arguing that the arrangement was designed as a “structural shock absorber” rather than a return to government-controlled petrol pricing.
Under the framework outlined by Dare, refiners and importers would absorb temporary cost increases above the threshold and recover them when international crude prices decline or foreign-exchange conditions improve.
He argued that predictable petrol prices were particularly important for commercial transportation because sudden increases at filling stations often result in immediate increases in fares.
Those transport fares, he said, rarely return to previous levels even when petrol prices subsequently fall.
The administration therefore believes smoothing extreme short-term fluctuations would provide greater stability for commuters, transport operators, businesses and households.
Presidency Accuses Atiku of Political Opportunism
Special Adviser to the President on Media and Public Communications Sunday Dare
Dare accused Atiku of attempting to capitalise on the hardship caused by high energy and living costs ahead of the 2027 general election. He described the former Vice President’s criticism as “election-laced demagoguery,” arguing that opposition to the intervention ignored similar measures being adopted internationally to cushion consumers from energy shocks.
“For decades, political opportunism in Nigeria has relied on a single, toxic formula: exploit temporary transitional discomfort, appeal to emotional cynicism, and promise mathematically impossible quick fixes to a sophisticated electorate,” he said.
The presidential aide further rejected Atiku’s suggestion that Tinubu had copied his economic policies but implemented them incorrectly.
According to him, the central difference between both positions was Atiku’s proposed production subsidy, which the Presidency believes could impose another unsustainable burden on public finances.
CNG, Domestic Refining Part Of Wider Strategy
CNG Buses Photo credit Freedom Square
Dare said the temporary petrol discount should not be viewed in isolation, maintaining that the Tinubu administration was pursuing broader measures to reduce Nigeria’s vulnerability to petrol price shocks.
He listed the expansion of Compressed Natural Gas infrastructure as one of the administration’s key interventions, particularly for commercial transportation.
According to him, CNG offers a considerably cheaper alternative to Premium Motor Spirit and could provide a longer-term solution to transportation costs as conversion centres and supporting infrastructure expand.
He also cited the naira-for-crude arrangement designed to support domestic refining and reduce exposure to foreign-exchange volatility.
Dare said the administration was pursuing strategic energy reserves and other mechanisms intended to protect domestic supply during severe global disruptions without permanently fixing prices.
The Presidency also pointed to tax reforms and measures aimed at eliminating illegal road levies and reducing logistics and food-distribution costs as part of the government’s broader economic programme.
Presidency Defends Tinubu’s 2023 Reforms
The latest confrontation comes against the backdrop of continuing controversy over the economic reforms introduced by Tinubu after assuming office in May 2023.
Tinubu announced the removal of petrol subsidy during his May 29, 2023, inauguration, ending a system successive governments had argued consumed huge amounts of public revenue.
His administration subsequently introduced sweeping foreign-exchange reforms.
The policies triggered major adjustments across the economy, with petrol, transportation, food and other essential costs rising sharply and worsening the cost-of-living pressure on millions of Nigerians.
The Federal Government has consistently maintained that the reforms were unavoidable because the subsidy and previous foreign-exchange system had become fiscally unsustainable.
Dare said the removal of petrol subsidy had stopped what he described as a multi-trillion-naira drain on public resources while increasing funds available for distribution to the three tiers of government through the Federation Account Allocation Committee, FAAC.
He also credited deregulation with improving petroleum product availability and reducing the prolonged queues that previously characterised periods of petrol scarcity.
On foreign exchange, the Presidency said the reforms had attacked opportunities for arbitrage created by the wide difference between official and parallel-market exchange rates.
Dare further said resources were being redirected towards cash transfers for vulnerable households, credit support for micro and small enterprises and wage interventions for workers.
He cited major infrastructure projects, including the Lagos-Calabar Coastal Highway and Sokoto-Badagry Superhighway, as part of the administration’s efforts to improve logistics and create conditions for sustainable economic growth.
‘Production Subsidy Road To Ruin’
Atiku has remained one of the Tinubu administration’s most persistent critics, particularly over petrol subsidy removal, foreign-exchange reforms and the impact of government policies on the cost of living.
The former Vice President has argued that economic reforms could have been implemented differently to reduce the immediate burden on Nigerians.
But the Presidency maintained on Sunday that returning to any form of blanket subsidy without adequate resources to finance it would merely recreate the problems the Tinubu administration had attempted to eliminate.
“The alternative Atiku offers — resurrecting opaque subsidy regimes under the guise of ‘production subsidies’ without the crude volumes to back them — is the exact road to ruin that almost brought Nigeria to its knees before May 2023,” Dare said.
He accused Atiku of offering what he called short-term political solutions instead of a sustainable economic programme.
Dare said Tinubu would continue combining market deregulation with temporary price-smoothing interventions, expansion of alternative fuels, domestic refining, infrastructure development and fiscal reforms.
“President Bola Ahmed Tinubu’s administration has chosen the hard, courageous, and necessary path. By coupling market deregulation with targeted price-smoothing mechanisms, strategic reserves, rapid CNG rollout, and disciplined fiscal management, the administration is laying a permanent foundation for sustainable prosperity,” he said.
The latest exchange deepens the political battle between the Presidency and Atiku over the management of Nigeria’s economy, with petrol prices and the wider cost-of-living crisis increasingly shaping the policy contest ahead of the 2027 general election.
DO YOU WANT TO WHISTLEBLOW, REPORT FRAUD, THEFT OR INJUSTICE OR INTIMIDATION? SEND US YOUR STORY/REPORT TO NEWSDESK@MEDIATODAY.NG
