… says ‘it’s a dangerous mathematical fantasy wrapped in political deceit’
Presidency on Sunday dismissed former Vice President Atiku Abubakar’s proposed production subsidy on petrol, describing it as “a dangerous mathematical fantasy wrapped in political deceit.”
It argued that Nigeria does not have the crude oil volumes to fund it.
Special Adviser to the President on Media and Public Communications, Sunday Dare, said this in a statement on Sunday, entitled, ‘Atiku’s Demagoguery in the Face of Tinubu’s Logical Policies.’
He described the recent press conference in Abuja by Atiku, who is the African Democratic Congress presidential candidate as “a seminal example of shallow, election-laced demagoguery.”
The ADC presidential flagbearer had criticised the 30-day discount on petrol by NNPC Retail and a price modulation framework, which he described as a “panic-driven gimmick,” according to Dare, and had claimed that President Bola Tinubu copied his economic homework without the production subsidy that made it work.
Dare cited the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, as saying on Channels Television that Nigeria produces about 1.8 million barrels of crude per day for a population of over 200 million.
However, the presidency clarified that the Federal Government does not directly own all of that oil.
It argued that under joint ventures and production sharing contracts signed over decades, production costs, royalties and profit-oil sharing ratios “severely reduce the equity crude available to the state,” leaving fewer than 700,000 barrels per day of unencumbered free crude.
“To propose a blanket ‘targeted production subsidy’ on crude without the physical, unencumbered volume to back it up is pure economic illiteracy,” Dare said, adding that, “It invites the very opacity, fraudulent round-tripping, and fiscal haemorrhage that crippled Nigeria for decades under the old subsidy regime.”
The presidency noted that refineries such as the Dangote Petroleum Refinery need more feedstock than the state can freely supply without breaching international supply contracts, which is why Dangote and other domestic refiners also import crude.
It rejected a comparison of crude allocation with farm produce like garri or cassava, saying it misrepresented commodity markets.
It also pointed to the United States, which it said produces over 10 million barrels per day for 330 million people but sells petroleum at market prices, and to Qatar, which it said had to cut energy subsidies significantly despite its large gas reserves and a population of under 500,000.
The presidency also rejected Atiku’s claim that the NNPC Retail discount amounted to a return to subsidy.
It said NNPC had offered the discount to mark Nigeria’s 66th Independence anniversary and had now offered to extend it by another 30 days.
Dare stated, “When NNPC Retail agrees to sell fuel at landing cost for 30 days during an unprecedented global crude price spike, it is not writing checks 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 the negotiated interim ceiling of N1,350 per litre on ex-gantry costs was “a structural shock absorber, not price control.”
Under it, refiners and importers absorb short-term cost spikes above the ceiling and recover them later when crude prices cool or the exchange rate adjusts.
The ceiling is reviewed monthly based on published cost audits, the statement noted.
“N1,400 today and N1,400 tomorrow provides far greater economic stability than N1,500 today and N1,300 tomorrow,” Dare said, adding that erratic fuel prices trigger transport fare hikes that rarely fall back.
The presidency further listed other measures the administration had taken, including a state-backed strategic energy reserve; a rapid rollout of compressed natural gas, which he said is 60 to 70 per cent cheaper than petrol; naira-for-crude supply to domestic refineries; windfall taxes on energy operators who gouge consumers, with the proceeds earmarked for transport vouchers and minimum-wage support; and enforcement of the 2025 tax reform laws to dismantle illegal road levies.
Dare said the removal of the petrol subsidy and the unification of the exchange rate had ended a multi-trillion-naira drain on public funds, which he said now flows to the 36 states and local governments through FAAC allocations.
He added that fuel queues had been eliminated and the gap between the official and parallel exchange rates closed.
Referring to Atiku’s reported description of Tinubu as a “dull student,” the presidency said, “It is sheer absurdity that a man who graduated from a school of hygiene dares to call a first-class accounting graduate a dull student.”
It added that “the Nigerian electorate is far too sophisticated to trade long-term national economic security for Atiku’s shallow, short-term demagoguery.”
