By Eshioromeh Sebastian
Former Vice-President Atiku Abubakar has said his proposed petrol subsidy policy would be temporary and tied directly to crude oil production, before being phased out later.
Paul Ibe, Atiku’s media adviser, clarified the former vice-president’s position during an interview on AIT, where he detailed the economic rationale behind the proposal and criticised the Bola Tinubu administration’s approach to subsidy removal.
“We are not returning to Egypt. We are not going back to the old regime that was opaque,” Ibe stated firmly.
According to Ibe, the proposed subsidy would function differently from the previous system. Instead of covering the gap between landing cost and pump price, the new model would involve supplying crude oil to local refiners at a discounted price—effectively subsidising production rather than consumption.
“What he’s simply saying is that the subsidy that he is advocating will be tied to the barrel, the crude oil barrel,” Ibe explained. “This is perhaps the only thing that we have in so much abundance that Nigerians have not yet benefited from.”
He argued that cheaper crude for domestic refiners would lower production costs for petrol and diesel, ultimately translating into reduced pump prices for consumers.
“The crude oil will be sold at a discounted price, subsidised to refiners, and that will enable refiners to be able to produce fuel and diesel at a cheap cost. And when they produce cheaply, they will sell at the real pump price,” he said.
Ibe added that an independent committee would determine the appropriate refinery-gate price based on prevailing market conditions, and that while the government would not fix prices, it would monitor them to ensure alignment with policy objectives.
“There’ll be a window because, of course, we deregulated. You may not fix the price but you can have price monitoring to ensure that everybody aligns with what government hopes to achieve,” he noted.
The spokesperson emphasised that the intervention would be time-bound—implemented for a limited period to stimulate economic activity and improve productivity before being phased out entirely.
“Yes, if you recall, his argument, even in 2023, was that they’re going to have recourse to having a phased removal,” Ibe recalled.
He sharply criticised the current administration for removing petrol subsidy alongside foreign exchange deregulation and electricity subsidy adjustments without allowing the economy to absorb the shocks.
“No surgeon, no doctor would carry out two or more serious major surgeries, one after the other. They would do one, allow the patient to recuperate, and then undertake the second, or the third,” Ibe said.
“But what has this administration done? The issue of subsidy, flippant. No cabinet. No advisers. Just in the heat of the moment, it has been removed. No shock absorbers. Nothing. No palliatives. Absolutely nothing.”
He argued that the simultaneous reforms had stifled productivity and left Nigerians struggling with devaluation-driven inflation.
“You need to give Nigerians and give manufacturers an opportunity to ensure that there is productivity,” Ibe said. “There is little or no productivity in this economy because, I mean, you talk about paying salary, that’s what they are doing there. There is no creativity. They’re simply having plenty of naira as a result of the devaluation.”
Beyond the fuel subsidy question, Ibe said Atiku’s broader economic vision would prioritise diversification away from crude oil dependency.
“We also need to start thinking about an economy that is beyond the oil economy. We need to diversify our economy,” he added.
Ibe’s remarks come amid an escalating war of words between Atiku and President Tinubu over the subsidy proposal. Tinubu had previously dismissed Atiku’s plan as evidence of “serious ignorance on governance and economy,” while Atiku rejected that characterisation, insisting his proposal was a “targeted, capped, budgeted and independently audited intervention” designed to support domestic production.
Discussion about this post