The Presidency says public debate over the cost of living and Nigeria’s economic direction should be encouraged, but must be grounded in the country’s current economic and petroleum realities.
Special Adviser to the President on Information and Strategy, Bayo Onanuga, stated this on Thursday while responding to former Vice President Atiku Abubakar’s proposal to restore petrol subsidy if elected President.
Mr Onanuga said Atiku was entitled to propose alternative economic policies, but Nigerians deserved to know how a restored subsidy would be funded and whether it could operate within the legal and structural changes introduced in the petroleum sector.
“The country should welcome robust debate about the cost of living and the direction of economic policy. But that debate must be anchored in Nigeria’s reality today, not yesterday’s petroleum economy,” he said.
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The Presidency also faulted Atiku’s change of position, recalling that he had advocated subsidy removal ahead of the 2023 presidential election; he argued that the proposal represented a reversal of his earlier economic position and questioned its fiscal sustainability.
Mr Onanuga explained that the former subsidy arrangement involved the NNPC absorbing the difference between the cost of supplying petrol and the regulated pump price, resulting in substantial under-recovery and losses.
While dismissing Atiku’s claim of a ₦30 trillion subsidy windfall, saying no such savings existed, the Presidential aide further noted that the Petroleum Industry Act had already provided for subsidy removal by the end of June 2023, maintaining that President Bola Ahmed Tinubu merely accelerated its implementation by a few weeks.
The Special Adviser to the President also noted that restoring subsidy would therefore require a new legal, fiscal and administrative framework, including identifying how it would be financed and implemented within the present market structure.
He argued that Nigeria’s petroleum industry has changed significantly with increased domestic refining, particularly the emergence of the Dangote Refinery, warning that a return to subsidy could undermine local production, threaten smaller refineries such as Aradel and result in job and foreign-exchange losses.
The Presidency said Nigeria now exports refined petroleum products to Europe, Asia and the United States, in contrast to the period when the country spent about $10 billion importing refined products.
Onanuga added that about ₦15 trillion that could have been borrowed and committed to discounted petrol had instead contributed to improved revenues for the three tiers of government, citing the nearly ₦3 trillion shared from the Federation Account in July.
He stated that the transition could strengthen energy security, conserve foreign exchange, support industrial development and generate employment.
The Presidential Spokesperson recalled that the previous subsidy regime was partly sustained through borrowing and other financing arrangements, including the pledging of crude oil against loans, noting that NNPC was under severe financial pressure in 2024 and owed suppliers billions of dollars.
Mr Onanuga challenged Atiku to explain the financial implications of his proposal, particularly with the economic cost of petrol put at between ₦1,200 and ₦1,300 per litre.
He acknowledged the pressure of petrol and transportation costs on households and businesses, saying the Tinubu administration would continue pursuing measures to ease the burden.
The Presidential aide cited the promotion of Compressed Natural Gas, which he said is about 70 per cent cheaper than petrol, noting that Dangote and BUA already operate CNG-powered trucks and urging commercial transport operators to pass lower energy costs to Nigerians.
He maintained that attention should instead be directed towards leveraging domestic refining, improved regulation and competition to achieve more stable and affordable energy prices.
The Presidential Spokesperson urged Atiku to provide details on the annual cost of his subsidy proposal, its funding source, whether borrowing would be required, possible amendments to the Petroleum Industry Act and safeguards against abuse.
Mr Onanuga warned against returning to policies whose costs could eventually manifest in increased debt, reduced expenditure on social services and further pressure on the naira, urging Atiku and other political actors to clearly present the full fiscal and legal implications of any proposal to restore petrol subsidy.
