Atiku outlines framework for domestic fuel subsidy - Punch Newspapers

Former Vice President Atiku Abubakar has said Dangote Refinery’s warning against government-imposed petrol prices that could force refiners to operate at a loss has vindicated, rather than undermined, his proposed production subsidy model. Atiku, the presidential candidate of the African Democratic Congress in a statement issued by his Senior Special Assistant on Public Communication, Phrank Shaibu on Friday, accused the government of deliberately misrepresenting his proposal in an attempt to discredit it. He said Dangote Refinery was right to resist any policy that would compel a private refinery to sell petrol below cost, stressing that his proposal was specifically designed to avoid such a situation. “Dangote raised a legitimate business concern. The presidency turned it into a campaign of fear. A refinery that has invested billions of dollars cannot be commanded to sell indefinitely below cost and absorb the losses. That would be reckless, economically destructive and unfair to any private investor. “But that is precisely why our proposal is different. We are restoring subsidy through a production subsidy model, not an import subsidy model,” the statement read in part. Atiku said the major distinction between his proposal and the previous petrol subsidy regime was that government support would be directed at domestic refining rather than imported petroleum products. According to him, the policy would reduce the cost of crude feedstock supplied to qualifying Nigerian refineries through a transparent and independently verified mechanism, allowing them to produce petrol at a lower cost. “If the crude entering a refinery becomes cheaper, the cost of producing petrol should also come down. That reduction should then reach the average Nigerian while preserving legitimate refining costs and a reasonable commercial margin,” he added. The former Vice President said the policy would not require Dangote Refinery or any other domestic producer to sell below cost. “There is a clear difference between helping a producer reduce costs and forcing that producer to sell at a loss,” he said. Atiku argued that the government could provide further relief to consumers where necessary, but such intervention should be openly funded through the budget rather than transferring the financial burden to private refiners. “If government wants to provide additional relief beyond what lower crude-input costs can sustainably deliver, then government must pay for that relief openly. “It must be budgeted. It must be capped. It must be audited. Nigerians must know exactly what is being spent and what they are receiving in return,” he said. Atiku noted that the proposed scheme would be subject to a hard fiscal ceiling, a maximum support level per barrel, independent verification of crude supplied to participating refineries, electronic tracking of crude intake and refined products, domestic supply obligations and independent audits. Evening Recap: Man stabs Sokoto Islamic cleric, FG pays ex-Nigeria Airways workers N18bn, other top stories Mamuda Group Chairman and Board Delegation Visit Dangote Refinery, Meet Aliko Dangote Dangote Refinery IPO better than selling PVC for N10,000, Rewane says “No mystery barrels. No endless claims. No blank cheques,” he stressed . He further maintained that the objective was to make domestic refining commercially viable while ensuring that Nigerians benefit from the country’s crude oil resources through lower fuel costs. “Dangote Refinery, modular refineries and other Nigerian investments must remain viable. We want more refineries, more investment, more competition and more refining capacity. “But the Nigerian consumer must also benefit from the fact that this country produces crude oil. “We reject the false choice between a profitable refinery and an affordable pump price. A competent government should be able to protect both the producer and the consumer, ” he added. Atiku’s comments followed concerns raised by Dangote Refinery over the implications of government intervention in petrol pricing, particularly the danger of forcing private refiners to absorb losses arising from artificially controlled pump prices. Atiku, however, said the concerns reinforced the need for a carefully structured production subsidy rather than invalidating the proposal. “Dangote is right that a refinery should not be forced to carry the burden of an artificially imposed price. We agree. “Nigerians are also right that the present cost of fuel, transportation, food and doing business has become unbearable. Our production subsidy answers both concerns,” he added. Atiku also criticised the Federal Government’s handling of the removal of petrol subsidy, arguing that the policy had contributed to higher transportation, food and business costs. “For three years, Nigerians have been told to endure. Fuel rises, they say endure. Transport rises, endure. Food rises, endure. Businesses are crushed by energy costs, endure,” he said. He accused the Federal Government of describing the resulting hardship as evidence that its economic reforms were working, while opposing his proposal to reduce the underlying cost of domestic petrol production. The former Vice President further rejected what he described as the presidency’s attempt to equate every form of subsidy with dependence on imported petroleum products. “If you do not refine in Nigeria, you do not qualify,” he said, stressing that the proposed intervention would not subsidise foreign refineries, importers or middlemen. Abdulrahman Zakariyau Abdulrahman is a journalist at Punch Newspapers with nearly a decade of professional experience covering political parties, elections, religion, civil society organizations, and the Nigeria Governors Forum. He is also a development and strategic communication expert, skilled at analyzing complex issues and delivering impactful narratives. Abdulrahman’s reporting reflects extensive newsroom experience, editorial judgment, and a strong commitment to informative and insightful journalism.

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