The Independent Media and Policy Initiative (IMPI) has warned that former Vice-President Atiku Abubakar’s proposal to restore fuel subsidy could discourage foreign investment and undermine Nigeria’s fiscal stability….
The Independent Media and Policy Initiative (IMPI) has warned that former Vice-President Atiku Abubakar’s proposal to restore fuel subsidy could discourage foreign investment and undermine Nigeria’s fiscal stability.
The think-tank gave the warning in a policy statement issued in Abuja on Tuesday by its chairman, Dr Omoniyi Akinsiju, titled “Atiku’s Fuel Subsidy Restoration Campaign Promise Fails Litmus Test of Practicability and Sustainability.”
Akinsiju said Atiku’s proposed economic recovery plan sought to shift fuel subsidies from importation to domestic production by allocating crude oil to eligible local refineries at discounted prices.
Under the proposed model, he said, public and private refineries would receive discounted crude on the condition that the savings were passed on to consumers.
However, the IMPI chairman described the arrangement as convoluted, arguing that it could subject commercial entities, including NNPC Limited and private refineries, to politically determined pricing formulas and undermine the Petroleum Industry Act (PIA) 2021.
He said the proposal could also send negative signals to international investors about Nigeria’s regulatory predictability.
“This policy shift would scare away international capital and freeze modern Public-Private Partnerships (PPPs), with repercussions for funding critical legacy infrastructure projects and a damning effect on production and productivity,” he said.
Akinsiju argued that fuel subsidies were inherently regressive because wealthier households with multiple vehicles typically consume more petrol than poorer Nigerians, many of whom depend on public transport.
He said subsidies did not eliminate the cost of fuel support but merely shifted where the cost was borne, creating what he described as a “fiscal illusion”.
The IMPI chairman further warned that re-regulating petrol prices could discourage marketers from supplying remote areas, potentially concentrating fuel supplies in major cities such as Lagos, Abuja, Kano and Port Harcourt.
He also raised concerns about the impact of subsidised crude allocations on revenue available to the Federation Account.
According to him, Nigeria’s previous subsidy regime contributed to significant deductions from oil revenues, reducing funds available to federal, state and local governments for infrastructure and social services.
Akinsiju argued that Atiku’s proposed model could reproduce the same problem by replacing a direct cash subsidy with a discount on crude oil revenue.
He further warned that the policy could encourage fuel shortages and a return of black-market trading in remote areas, potentially increasing transport costs and worsening food inflation.
“We reiterate that Nigeria’s historical infrastructure deficit cannot be solved by returning to the fiscal policies that created it,” he said.
Akinsiju maintained that Atiku’s proposed model could provide temporary relief at the pump while compromising the long-term funding required for roads, hospitals, schools and energy infrastructure.
