The Presidency has challenged former Vice-President and African Democratic Congress (ADC) presidential candidate Atiku Abubakar to explain how he intends to finance his proposed return to petrol subsidy if elected president in 2027.
The government’s position was contained in a statement issued on Thursday by Bayo Onanuga, Special Adviser to President Bola Ahmed Tinubu on Information and Strategy, following Atiku’s pledge to restore the subsidy regime.
Onanuga described Atiku’s proposal as a reversal of his previous position, noting that the former vice-president had supported the removal of petrol subsidy during the build-up to the 2023 presidential election.
The presidential adviser said Atiku was entitled to propose alternative policies but argued that Nigerians should understand the financial and legal implications of restoring the subsidy.
“Political promises must be backed by fiscal arithmetic,” Onanuga said.
He challenged the ADC candidate to provide specific answers on the proposed policy, including its annual cost and source of funding.
“How much will the programme cost annually? What revenue source will finance it? Will the government borrow to fund it?” he asked.
Onanuga also questioned whether restoring the subsidy would require amendments to existing petroleum-sector legislation and how the government would prevent the abuses that characterised the previous regime.
He said the subsidy was not simply money sitting in government coffers waiting to be distributed to Nigerians.
“It is the massive discount the NNPC offered the Nigerian government: selling fuel it bought at N100 at N50 at the pump, leading to under-recovery of costs and massive losses,” the statement said.
According to the Presidency, the former subsidy regime placed a significant burden on public finances and was dismantled as part of broader reforms under the Petroleum Industry Act.
The statement noted that the PIA had provided for subsidy removal by the end of June 2023, arguing that Tinubu only accelerated the process after assuming office.
“The PIA scheduled the subsidy removal by the end of June 2023. President Tinubu only accelerated it by weeks to stop further bleeding before the due date,” Onanuga said.
The Presidency also argued that Nigeria’s petroleum industry has changed significantly since the subsidy was removed, particularly with the growth of domestic refining.
Onanuga cited the Dangote Refinery as a major development in the sector, saying increased local refining capacity had reduced the country’s reliance on imported petrol.
He argued that a return to the old subsidy arrangement could undermine the progress made by domestic refiners.
“Atiku’s proposal portends a reversal of current local production, and it will spell bankruptcy for smaller local refineries like Aradel’s, causing attendant job losses and a loss of foreign exchange,” he said.
The presidential adviser further argued that Nigeria was gradually moving from a system dependent on imported refined petroleum products to one based increasingly on domestic refining.
According to him, the transition could improve energy security, conserve foreign exchange and support industrial development and job creation.
Onanuga also pointed to the financial resources now available to the three tiers of government following the removal of the subsidy and changes to the foreign exchange regime.
“The N15 trillion that would have been borrowed and spent on selling discounted petrol has now significantly gone into the coffers of the three tiers of government,” he said.
He added that federal, state and local governments had benefited from increased allocations, noting that the three tiers shared about N3 trillion from the Federation Account in July.
The Presidency acknowledged the economic pressure caused by higher petrol and transportation costs but argued that restoring the subsidy would not provide sustainable relief.
It cited the government’s promotion of Compressed Natural Gas (CNG) as an alternative energy source, noting that CNG is significantly cheaper than petrol for certain forms of transportation.
“We believe sustainable relief is different from recreating a fiscal arrangement that will again cripple our country,” Onanuga said.
He argued that the focus should instead be on expanding domestic refining, improving petroleum-sector regulation and increasing competition to achieve more stable and affordable energy prices.
The Presidency also questioned what exactly a restored subsidy would cover in the current market, given the rise in domestic petrol production.
“And, now that Nigeria has substantially increased domestic petrol production, what precisely would the proposed subsidy be subsidising, the cost of local production, transportation and distribution, or some other component of the petroleum value chain?” the statement asked.
Onanuga warned that returning to the former system could ultimately result in higher public debt or reduced government spending on infrastructure and social services.
“Ultimately, that cost falls on the public finances—through reduced funds for infrastructure and social services, reduced allocation to states and 774 local councils, increased borrowing, higher public debt, or some combination of these,” he said.
He maintained that the debate over petrol subsidy remained legitimate but should be based on the realities of Nigeria’s current economy rather than the conditions that existed before the reforms.
“Nigeria cannot afford to return to policies whose costs are hidden from citizens until they appear later as debt, reduced government spending on social services, and further pressure on the national currency,” Onanuga said.
The Presidency urged Atiku and other political actors to provide Nigerians with detailed fiscal and legal plans for any proposal to restore petrol subsidy ahead of the 2027 presidential election.
