Tinubu’s petrol discount not fuel subsidy, Presidency tells Atiku

Dr Sunday Dare, Special Adviser to the President on Media and Public Communications, said Atiku’s criticism of the discount offered by the Nigerian National Petroleum Company Limited (NNPCL) reflected a misunderstanding of global energy markets and Nigeria’s crude oil production arrangements.

In a statement on Sunday, Mr Dare also faulted Atiku’s proposal for a production subsidy, arguing that Nigeria lacked sufficient unencumbered crude oil to support a broad subsidy scheme without undermining government revenue and reviving the abuses associated with the former petrol subsidy regime.

The statement followed Atiku’s criticism of the NNPCL Retail’s decision to extend a 30-day petrol discount and the government’s reported price-modulation framework.

Mr Dare said the discount was initially introduced to mark Nigeria’s 66th Independence anniversary before being extended for another month.

He explained that the arrangement allowed NNPCL Retail to forgo its profit margin temporarily and sell petrol at landing cost, thereby cushioning consumers against increases in global crude oil prices.

According to him, the measure was designed to absorb short-term market volatility without requiring the Federal Government to resume direct subsidy payments.

“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,” he said.

Mr Dare also defended the reported interim N1,350-per-litre ceiling on ex-gantry costs, describing it as a mechanism to moderate sudden increases in fuel prices rather than an attempt to impose permanent price controls.

Under the arrangement as described by the presidential aide, refiners and importers would absorb costs above the ceiling temporarily and recover them later when global crude prices decline or local exchange rates improve.

He argued that moderating sudden price increases could help prevent commercial transport operators from raising fares sharply whenever petrol prices rise.

“N1,400 today and N1,400 tomorrow provides far greater economic stability than N1,500 today and N1,300 tomorrow,” Mr Dare said.

He added that the ceiling would be reviewed monthly through cost audits to prevent the accumulation of undisclosed government liabilities.

However, the statement did not provide further details on the implementation of the reported ceiling, the arrangements for recovering deferred costs or the specific auditing mechanism.

Presidency challenges Atiku’s production subsidy proposal

Mr Dare said Atiku’s proposal for a production subsidy was impractical because the Federal Government did not own all the crude oil produced in Nigeria and could not freely allocate the entire volume to domestic refineries.

He cited figures presented by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, on Channels Television, which put Nigeria’s crude oil production at about 1.8 million barrels per day, serving a population of more than 200 million people.

According to Mr Dare, joint ventures and production-sharing contracts, alongside production costs, royalties and profit-sharing arrangements, significantly reduce the volume of crude available to the government without existing contractual obligations.

He claimed that Nigeria had fewer than 700,000 barrels per day of unencumbered crude oil available for such purposes.

The presidential aide argued that major domestic refineries, including the Dangote Petroleum Refinery, required substantial quantities of crude oil beyond what the government could freely allocate without affecting existing supply agreements or public revenue.

He said domestic refiners therefore had to supplement local supplies with crude purchased from international markets.

Mr Dare maintained that introducing a broad production subsidy without sufficient crude oil volumes to support it could encourage opacity, fraudulent trading and fiscal losses similar to those associated with the previous subsidy regime.

He also rejected comparisons between crude oil allocation and the availability of locally produced agricultural commodities, such as garri and cassava, describing the analogy as misleading because of the contractual and commercial complexities of the international energy market.

The presidential aide cited the United States and Qatar as examples of oil and gas-producing countries that had maintained market-based energy pricing or reduced subsidies to protect their public finances.

He argued that Nigeria could not sustainably promise unlimited production subsidies without accounting for the country’s contractual obligations and fiscal constraints.

Mr Dare also criticised Atiku for suggesting that Tinubu had borrowed elements of his economic proposals while excluding the production subsidy component.

He dismissed the former vice-president’s criticism as politically motivated and argued that the administration’s policies were based on the realities of Nigeria’s energy market.

Presidency lists measures to cushion fuel price increases

Beyond the temporary petrol discount, Mr Dare said the Tinubu administration was pursuing several measures aimed at improving energy security and reducing the impact of fuel prices on households and businesses.

He said the government was establishing a state-backed strategic energy reserve to enable the release of refined petroleum products during supply disruptions or when hoarding threatens market stability.

The presidential aide also highlighted the expansion of compressed natural gas (CNG) infrastructure in partnership with state governments, saying the alternative fuel could provide a cheaper option for commercial transport operators.

According to him, CNG could cost between 60 and 70 per cent less than petrol, although the actual savings would depend on prevailing prices and conversion and operating costs.

Mr Dare further said the government had used naira-for-crude arrangements to support domestic refining and reduce the exposure of local fuel prices to foreign exchange volatility.

He also listed windfall taxes on energy operators during periods of exceptional profits, with the proceeds intended to support transport vouchers and minimum-wage interventions.

The presidential aide said the administration was implementing the 2025 tax reform laws to address illegal road levies and using NIPOST digital address codes to reduce freight and food distribution costs.

He did not provide details on the implementation status or measurable outcomes of some of the measures listed.

Presidency defends Tinubu’s economic reforms

Mr Dare said Atiku’s criticism failed to account for the economic conditions that preceded Tinubu’s assumption of office in May 2023.

He defended the removal of petrol subsidy and the unification of the foreign exchange market, describing the measures as necessary interventions to address what he called longstanding structural weaknesses in the Nigerian economy.

According to him, the removal of the subsidy reduced the financial burden on the government and freed up resources for distribution to state and local governments through the Federation Account Allocation Committee (FAAC).

He argued that increased allocations had given state governments more resources to invest in education, healthcare, infrastructure and other public services.

The presidential aide also said the removal of petrol subsidy had eliminated the multi-day queues that previously occurred at filling stations during periods of fuel scarcity.

He attributed the improvement in fuel availability to the operation of market forces, despite continuing exposure to fluctuations in global energy prices.

On foreign exchange, Mr Dare said the administration had eliminated the gap between official and parallel market rates that previously created opportunities for currency round-tripping and arbitrage.

He argued that the changes had helped restore confidence in Nigeria’s financial system.

The statement also highlighted cash transfers to vulnerable households, subsidised credit for micro and small businesses and wage awards for civil servants as measures intended to cushion the impact of the reforms.

Mr Dare said the administration was pursuing major infrastructure projects, including the Lagos-Calabar Coastal Highway, the Sokoto-Badagry Superhighway and railway developments, which he described as investments needed to support industrial growth and reduce the cost of moving people and goods.

He argued that the combination of market reforms, targeted interventions and infrastructure development offered a more sustainable path to economic growth than a return to broad-based fuel subsidies.

Presidency accuses Atiku of political opportunism

The presidential aide accused Atiku of exploiting the economic hardship facing Nigerians for political advantage ahead of the 2027 general elections.

He said the former vice-president’s criticism relied on emotional appeals rather than a comprehensive assessment of the country’s fiscal position and the challenges confronting the energy sector.

Mr Dare also took a personal swipe at Atiku, contrasting his educational background with that of President Tinubu, whom he described as a first-class accounting graduate.

He argued that Atiku’s criticism of the President’s economic decisions was not supported by a workable alternative capable of addressing Nigeria’s crude oil supply constraints and fiscal challenges.

The presidential aide said the administration had chosen to combine market-based pricing with temporary measures to moderate price volatility, expand alternative energy sources and maintain fiscal discipline.

He maintained that the approach would provide a more sustainable foundation for economic recovery than restoring a subsidy arrangement that he said had previously created opportunities for abuse.

Mr Dare urged Nigerians to assess the administration’s economic policies against the country’s long-term needs rather than what he described as short-term political promises.

He said the government would continue to pursue reforms intended to improve energy security, strengthen public finances and support economic growth.

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