Former Vice President Atiku Abubakar has unveiled a new petroleum subsidy model that would shift government support from imported fuel to domestic refining, with subsidies capped, budgeted and tied to verifiable production and benefits to Nigerian consumers.
Atiku, presidential candidate of the African Democratic Congress (ADC), said his proposed Atiku Economic Recovery Plan (AERP) 2027 would provide qualifying Nigerian refineries with crude oil at preferential prices, subject to strict conditions on production, efficiency, transparency and domestic supply.
In a statement issued by his Senior Special Assistant on Public Communication, Phrank Shaibu, Atiku said the proposal was not an attempt to restore Nigeria’s previous fuel subsidy regime.
“My proposal is not to resurrect the old subsidy regime. We will move subsidy from importation to production, from middlemen to Nigerian refineries, and from unverifiable claims to verifiable barrels,” he said.
“The principle is simple: the subsidy will follow the barrel.”
Under the proposal, both public and private refineries that meet prescribed requirements would be eligible for domestically produced crude at preferential prices.
Atiku acknowledged that selling crude below its market-equivalent value would impose an opportunity cost on the Federation, but said the cost would be explicitly calculated, capped and disclosed.
“The cost will be known. The ceiling will be known. The beneficiaries will be known. And, most importantly, the benefit delivered to Nigerians will be measurable,” he said.
“We will determine what Nigeria can afford before we subsidise. We will not subsidise first and discover the bill afterwards.”
No Cheap Crude without Cheaper Products
Atiku said a central safeguard of the proposed programme would be preventing refinery operators from receiving discounted crude without transferring the benefits to consumers.
Under the AERP, he said, no refinery would qualify for subsidised crude unless a corresponding and independently verified volume of refined petroleum products was supplied to the Nigerian market under a transparent pricing formula reflecting the crude discount.
The system would reconcile crude allocations with refinery intake, production yields, inventories and domestic deliveries, providing what Atiku described as the ability to track every subsidised barrel from allocation to the eventual supply of refined products.
“No phantom cargoes. No fictitious imports. No unverifiable under-recoveries. No retrospective claims,” Atiku said.
“If you receive subsidised Nigerian crude, you must refine it in Nigeria, supply the agreed products to Nigerians and pass the benefit to Nigerians. Otherwise, you do not qualify.”
He said eligibility would be rules-based and open to qualifying public and private refineries, with allocations determined by independently verified capacity, efficiency, domestic supply and compliance rather than political discretion.
Operators found to have diverted subsidised crude or products to more lucrative foreign markets, manipulated production records or failed to fulfil domestic supply and pricing obligations would lose eligibility, refund the subsidy benefit and face regulatory or legal sanctions.
“Nigeria will not subsidise anybody’s private profit. Public support must produce a measurable public benefit,” he said.
Subsidy to Have Annual Fiscal Ceiling
Atiku said the programme would be subjected to a predetermined annual fiscal ceiling approved through the federal budget, arguing that this would prevent the return of open-ended subsidy liabilities.
“No refinery gets unlimited support. No marketer brings the government a surprise bill. No agency manufactures an under-recovery after the transaction,” he said.
“The National Assembly will see the appropriation. Nigerians will know the maximum exposure. Independent auditors will see the barrels. And the public will see what was produced for every naira of support.”
Where oil revenues exceed the budget benchmark, Atiku said a predetermined and legally appropriated portion of the additional revenue could be used within the established ceiling.
He added that his administration would disclose the opportunity cost of preferential crude pricing and its implications for revenues accruing to federal, state and local governments rather than conceal such costs through deductions from the Federation Account.
Atiku: Subsidy Designed to Disappear
Atiku said the proposed intervention would have statutory sunset and periodic review provisions designed to progressively reduce the subsidy as domestic refining expands.
Support per barrel would decline as refining capacity, utilisation and competition increase and production costs fall, according to predetermined benchmarks.
“Our objective is not permanent subsidy. It is to use temporary and disciplined support to build a refining industry strong enough eventually not to need subsidy,” he said.
The former Vice President said the government would continually measure the fiscal cost against refinery output, domestic petroleum prices, employment, investment and consumer benefits.
He argued that lower petrol and diesel prices would have broader economic consequences by reducing transportation, energy and logistics costs for households, farmers, manufacturers and traders.
“The ultimate objective is not merely cheaper petrol. It is cheaper transportation, cheaper food, stronger businesses, more Nigerian jobs and greater purchasing power,” Atiku said.
“Nigeria’s crude should first help build Nigerian refining capacity and Nigerian prosperity.”
Questions Tinubu’s Subsidy Removal
Atiku also used the policy announcement to challenge President Bola Tinubu’s handling of fuel subsidy removal, arguing that questions remained over petroleum-related expenses subsequently recorded in government accounts.
Tinubu announced during his May 29, 2023 inauguration that “subsidy is gone,” after which petrol prices rose sharply.
Atiku said Nigerians had borne higher transportation, food and other living costs following the policy and were entitled to clarity over subsequent government petroleum expenditure.
He cited NNPC Limited’s audited financial statements as recording approximately N4.84 trillion in Energy Security Expenses in 2023 and N7.13 trillion in 2024.
Atiku demanded a detailed explanation of what constituted the expenses and whether they included under-recoveries, pricing differentials or other petroleum supply costs.
“We are not interested in playing games with accounting terminology,” Atiku said.
“If government continued absorbing differences between the economic cost of petroleum products and what was recovered from the market, then Nigerians are entitled to ask how that differs economically from the subsidy they were told had disappeared.”
He argued that Nigerians should not face market-level pump prices based on the assertion that subsidy had ended while government resources simultaneously absorbed petroleum-related costs that were not adequately explained.
Raises N30tn Federation Account Questions
Atiku also linked the petroleum debate to what he described as wider questions over the management of Federation revenues, saying his team’s reconciliation of published Federation Account figures had identified approximately N30 trillion requiring further explanation.
He stressed, however, that he was neither alleging that the entire N30 trillion represented fuel subsidies nor asserting that it had been stolen.
“We are saying that approximately N30 trillion reflected across Federation revenues, deductions, savings, transfers and related classifications requires a complete, month-by-month public reconciliation,” he said.
Atiku consequently posed what he described as two separate questions to the Tinubu administration: what became of the fiscal gains from subsidy removal and the nature of subsequent petroleum-related government expenses; and how approximately N30 trillion in Federation revenues, deductions, savings, transfers and related funds should be reconciled.
“These are government figures. The accounts are in government’s custody. The burden cannot be transferred to Nigerians or the opposition,” he said.
“Publish every deduction. Identify every beneficiary. Show every transfer. Show every balance. Show the legal authority.
“If the money is properly accounted for, open the books and end the argument.”
Atiku also pledged that previous subsidy transactions would face lawful scrutiny under an ADC administration, with prosecution and asset recovery pursued where due process established that public funds had been fraudulently obtained or diverted.
“Anyone who stole subsidy money should prepare to return it. But we will not replace one opaque system with another,” he said.
Atiku contrasted his proposal with Tinubu’s approach, arguing that the AERP would first establish the scope, fiscal ceiling and accountability mechanisms for intervention before implementation.
“That is the Atiku alternative: Target it. Cap it. Budget it. Track it. Audit it. Make Nigerians feel the benefit. Reduce it as domestic production grows. And ultimately, end the need for it altogether,” he said.
Follow us on:
