ATIKU’s SUBSIDY PLAN WOULD BANKRUPT NIGERIA, PRESIDENCY WARNS

The Presidency has launched a blistering attack on former Vice-President Atiku Abubakar over his proposed production subsidy on petrol, describing it as “a dangerous mathematical fantasy wrapped in political deceit” and warning that the Atiku subsidy plan crude shortfall reality makes the proposal impossible to fund.

The statement, issued by Special Adviser to the President on Media and Public Communications, Sunday Dare, represents the administration’s most detailed rebuttal yet of the African Democratic Congress (ADC) presidential candidate’s economic agenda.

THE PROPOSAL: WHAT ATIKU PROMISED

Atiku Abubakar, the ADC presidential candidate and a frontline contender in the 2027 election, has proposed what he calls a “capped production subsidy” on petroleum products refined locally. His argument is straightforward: by subsidising production rather than consumption, the government can lower pump prices without the distortions and corruption that plagued the old subsidy regime.

At a press conference in Abuja, Atiku criticised the 30-day petrol discount introduced by NNPC Retail and the accompanying price-modulation framework, describing the initiative as a “panic-driven gimmick.”

He accused President Bola Tinubu of copying elements of his economic blueprint without implementing the production subsidy that he believes would make those policies effective.

His running mate, Rotimi Amaechi, has said an Atiku administration would seek an amendment to the Petroleum Industry Act if existing law prevents the proposed subsidy from being implemented, a statement that confirms the Atiku ticket recognises the proposal may require legislative action.

THE PRESIDENCY’S RESPONSE: “ECONOMIC ILLITERACY”

The Presidency did not hold back. In a statement titled “Atiku’s Demagoguery in the Face of Tinubu’s Logical Policies,” Dare described Atiku’s press conference as “a seminal example of shallow, election-laced demagoguery”.

“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 .

The core of the Presidency’s argument rests on a fundamental distinction that it says Atiku either does not understand or is deliberately ignoring: Nigeria does not own all the crude oil it produces.

THE CRUDE SHORTFALL: WHY THE NUMBERS DON’T ADD UP

The Presidency cited Taiwo Oyedele, the Minister of Finance and Coordinating Minister of the Economy, who stated on Channels Television that Nigeria produces approximately 1.8 million barrels of crude oil per day for a population exceeding 200 million.

But the Presidency argued that total production is not the same as the crude available to the Federal Government for discretionary use.

Under joint ventures and production sharing contracts signed over decades, production costs, royalties and profit-oil sharing ratios “severely reduce the equity crude available to the state,” leaving fewer than 700,000 barrels per day of unencumbered free crude .

“To propose a blanket ‘targeted production subsidy’ on crude without the physical, unencumbered volume to back it up is pure economic illiteracy,” Dare said. “It invites the very opacity, fraudulent round-tripping, and fiscal haemorrhage that crippled Nigeria for decades under the old subsidy regime”.

The Presidency further noted that mega-refineries, including the Dangote Petroleum Refinery, require far more crude feedstock than the government can freely provide without breaching existing international supply contracts. This, it said, is why domestic refiners also import crude.

THE INTERNATIONAL COMPARISONS

The Presidency rejected comparisons between crude oil allocation and agricultural commodities like garri or cassava, saying the analogy misrepresented the complex contractual and commercial realities of international energy markets .

It also pointed to the United States, which produces over 10 million barrels per day for a population of about 330 million but sells petroleum at market prices.

Qatar, it added, had to cut energy subsidies significantly despite its large gas reserves and a population of under 500,000.

THE NNPC DISCOUNT: NOT A SUBSIDY

The Presidency also rejected Atiku’s claim that the NNPC Retail discount amounted to a return to subsidy through the back door.

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According to Dare, NNPC initially introduced the discount to mark Nigeria’s 66th Independence anniversary before extending it for another 30 days. The arrangement allows NNPC Retail to forgo its profit margin temporarily and sell petrol at landing cost, cushioning consumers against increases in global crude oil 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 cheques 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 .

He described the negotiated interim ceiling of ₦1,350 per litre on ex-gantry costs as “a structural shock absorber, not price control.”

Under it, refiners and importers absorb short-term cost spikes above the ceiling and recover them later when crude prices cool or the exchange rate adjusts. The ceiling is reviewed monthly based on published cost audits .

“N1,400 today and N1,400 tomorrow provides far greater economic stability than N1,500 today and N1,300 tomorrow,” Dare said, adding that erratic fuel prices trigger transport fare hikes that rarely fall back .

THE ADMINISTRATION’S ALTERNATIVE

The Presidency listed a series of measures it said the Tinubu administration had taken to address energy costs and support consumers:

· A state-backed strategic energy reserve

· Rapid rollout of compressed natural gas (CNG), which Dare said is 60 to 70 per cent cheaper than petrol

· Naira-for-crude supply to domestic refineries· Windfall taxes on energy operators who benefit excessively from price surges, with proceeds earmarked for transport vouchers and minimum-wage support

· Enforcement of the 2025 tax reform laws to dismantle illegal road levies Dare said the removal of the petrol subsidy and the unification of the exchange rate had ended a multi-trillion-naira drain on public funds, which he said now flows to the 36 states and local governments through FAAC allocations.

He added that fuel queues had been eliminated and the gap between the official and parallel exchange rates closed .

THE POLITICAL UNDERCURRENT

The exchange is not merely economic. It is political and personal.

The Presidency’s statement referred to Atiku’s reported description of Tinubu as a “dull student,” responding: “It is sheer absurdity that a man who graduated from a school of hygiene dares to call a first-class accounting graduate a dull student” .It added that “the Nigerian electorate is far too sophisticated to trade long-term national economic security for Atiku’s shallow, short-term demagoguery”.

Atiku, for his part, has framed his campaign around the cost-of-living crisis, accusing the Tinubu administration of failing to provide Nigerians with affordable transportation and cheaper fuel. He has described the government’s approach to transportation policy as confused and “clay-footed,” arguing that Nigerians need immediate relief rather than promises whose benefits would take years to materialise.

THE QUESTION ATIKU MUST ANSWER

Beyond the political rhetoric, Atiku’s proposal faces a fundamental accountability test that he has not yet addressed. If he claims the subsidy can be capped and budgeted, what is the cap? What is the proposed annual budget? What volume of locally refined petrol will qualify? What is the subsidy per barrel or litre? What happens if international crude prices rise sharply or the exchange rate moves against Nigeria? What enforceable mechanism will guarantee that the financial benefit given to producers is passed through the distribution chain to the consumer?

These are questions of elementary public finance. The APC Presidential Campaign Council has already asked Atiku to disclose the proposed subsidy rate, annual expenditure ceiling, eligible volume, funding source and safeguards against diversion, smuggling and fraudulent claims.

WHY IT MATTERS

For voters, the debate offers a choice between two incomplete narratives. Atiku promises relief without explaining how it would be funded. The Presidency defends the removal of subsidies without offering a clear path to lower prices.The truth is that Nigeria’s energy challenge is not merely about subsidy or no subsidy. It is about ownership, production, refining, pricing and the political will to make hard choices.

ValidViewNetwork reports that the Presidency has dismissed Atiku’s subsidy plan as unworkable. Atiku has not yet responded to the crude shortfall argument directly, and the question of how he would fund his proposal remains unanswered.