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Former Vice President Atiku Abubakar has accused the administration of President Bola Tinubu of deliberately distorting his proposed petrol production subsidy, saying a warning by Dangote Refinery against arbitrary pump-price controls actually supports his position.
Mr Atiku, the presidential candidate of the African Democratic Congress (ADC), said his proposal was not to force domestic refineries to sell petrol below cost but to subsidise crude refined locally in order to reduce production costs and make fuel more affordable.
He made the clarification in a statement issued by his Senior Special Assistant on Public Communication, Phrank Shaibu.
The statement followed concerns raised by Dangote Refinery over the potential impact of government-imposed fuel prices on the viability of private refineries.
Atiku said the refinery’s position was a legitimate business concern which the Presidency had allegedly twisted into an argument against his proposal.
“Dangote raised a legitimate business concern. The Presidency turned it into a campaign of fear,” he said.
According to him, no private refinery that has invested billions of dollars should be compelled to sell its products indefinitely below cost and absorb the resulting losses.
“A refinery that has invested billions of dollars cannot be commanded to sell indefinitely below cost and absorb the losses.
“That would be reckless, economically destructive and unfair to any private investor.
“But that is precisely why our proposal is different.
“We are restoring subsidy through a production subsidy model, not an import subsidy model,” Mr Atiku said.
The former vice president explained that his proposed model would support crude oil refined within Nigeria rather than subsidise imported petrol.
He said the distinction was critical because an import subsidy would use public funds to make petroleum products refined abroad cheaper, whereas a production subsidy would reduce the cost of producing fuel domestically.
“The difference is simple enough for every Nigerian to understand.
“Import subsidy spends public money supporting petrol refined abroad and brought into Nigeria.
“Production subsidy supports crude refined here in Nigeria so that Nigerian refineries can produce fuel more cheaply and Nigerians can pay less,” he said.
Mr Atiku likened the proposal to government interventions aimed at lowering the cost of locally produced food.
“Think of it like rice. If government wants rice to become cheaper, it has two choices: spend money making imported rice cheaper, or help Nigerian farmers reduce the cost of producing rice at home.
“The second option lowers prices while also creating jobs, strengthening local businesses and keeping economic activity in Nigeria.
“That is exactly what we are proposing for fuel,” he said.
According to him, the proposed subsidy would be tied directly to crude oil processed by qualifying Nigerian refineries.
“We are restoring subsidy, but moving it from importation to production.
“The subsidy follows the barrel refined in Nigeria,” he said.
Mr Atiku said the cost of crude feedstock supplied to eligible domestic refineries would be reduced through a transparent, capped and independently verified mechanism.
He argued that reducing the cost of crude supplied to refineries should ultimately reduce the cost of producing petrol.
“If the crude entering a refinery becomes cheaper, the cost of producing petrol should also come down.
“That reduction should then reach the average Nigerian while preserving legitimate refining costs and a reasonable commercial margin,” he said.
The former vice president stressed that there was a fundamental difference between helping a refinery reduce its production costs and compelling it to sell below cost.
“There is a clear difference between helping a producer reduce costs and forcing that producer to sell at a loss.
“The Tinubu Presidency knows this. If it pretends otherwise, then it is not confused. It is deliberately misleading Nigerians,” he alleged.
Mr Atiku further accused the Presidency of equating every form of subsidy with dependence on imported petroleum products.
He described the argument as an attempt to distort the policy debate and portray his proposal as a return to the old system of subsidising fuel imports.
“Under our plan, support will be tied strictly to crude refined in Nigeria.
“Nigerian refineries will benefit. Nigerian workers will benefit. Nigerian businesses will benefit. Nigerian consumers will benefit.
“If you do not refine in Nigeria, you do not qualify,” he said.
Atiku insisted that the proposed intervention would not benefit foreign refineries, importers or middlemen.
“This is not a subsidy for foreign refineries.
“It is not a subsidy for importers.
“It is not a subsidy for middlemen.
“It is a subsidy for Nigerian production,” he said.
The ADC presidential candidate also accused the Tinubu administration of becoming increasingly defensive of an economic model which, according to him, had worsened the cost of living for millions of Nigerians.
He said Dangote’s concerns over margins, price controls and policy uncertainty should not be interpreted as an argument against supporting domestic production.
“Dangote raised concerns about margins, price controls and policy uncertainty.
“The Presidency somehow converted that into a prophecy that the economy would collapse.
“That is not economics. It is melodrama from the Villa,” he said.
Mr Atiku argued that the refinery’s warning actually demonstrated why any government intervention must be carefully designed to protect both producers and consumers.
“A refinery warning that it should not be forced to sell at a loss is not the same as saying that government must never support domestic production.
“In fact, the warning proves why the intervention must be intelligently structured.
“Our policy does exactly that,” he said.
He said his proposed administration would not impose an arbitrary pump price on domestic refineries and leave them to bear the resulting financial burden.
“If government wants to provide additional relief beyond what lower crude-input costs can sustainably deliver, then government must pay for that relief openly.
“It must be budgeted. It must be capped. It must be audited.
“Nigerians must know exactly what is being spent and what they are receiving in return,” he said.
According to him, government should not announce a politically attractive petrol price while quietly transferring the cost to private refiners.
“You cannot announce a politically convenient petrol price and quietly dump the cost on the refinery.
“That is not policy.
“That is confiscation by another name,” Mr Atiku said.
He said the production subsidy would therefore be subject to strict safeguards to prevent abuse and protect public funds.
The safeguards, according to him, would include a hard fiscal ceiling, a maximum support level per barrel, independent verification of supported crude, electronic tracking of crude intake and refined output, domestic supply obligations, transparent pricing, independent audits and severe penalties for diversion or fraud.
“We will know how many barrels receive support, which refinery receives them, what is produced, what it costs the taxpayer and what benefit Nigerians receive.
“No mystery barrels. No endless claims. No blank cheques,” he said.
Atiku said the future of Nigeria’s refining industry would depend substantially on private investment and that the commercial viability of existing and prospective refineries must therefore be protected.
“Dangote Refinery, modular refineries and other Nigerian investments must remain viable.
“We want more refineries, more investment, more competition and more refining capacity,” he said.
However, he said the viability of refineries should not come at the expense of consumers, particularly in a country that produces crude oil.
“But the Nigerian consumer must also benefit from the fact that this country produces crude oil.
“We reject the false choice between a profitable refinery and an affordable pump price.
“A competent government should be able to protect both the producer and the consumer,” he said.
Mr Atiku also accused the Tinubu administration of treating rising hardship as an unavoidable consequence of economic reform.
“For three years, Nigerians have been told to endure.
“Fuel rises, they say endure. Transport rises, endure. Food rises, endure.
“Businesses are crushed by energy costs, endure. Household incomes collapse, endure,” he said.
According to him, every new hardship has been presented by the government as evidence that its reforms are working.
“Every new hardship is presented as proof that reform is working.
“Then we propose a production subsidy that will reduce the underlying cost of making petrol in Nigeria, and suddenly the Presidency predicts catastrophe,” he said.
Mr Atiku questioned why a government would oppose a policy designed to reduce domestic production costs.
“What kind of government is terrified by a policy designed to make production cheaper and life more affordable?” he asked.
He also accused the administration of inconsistency in its approach to government intervention in the economy.
Mr Atiku noted that the government routinely grants waivers, tax credits, incentives and concessions to businesses, arguing that similar intervention should not be considered unacceptable when the intended beneficiaries are ordinary Nigerians.
“So intervention is acceptable when government gives waivers and concessions to powerful interests, but it suddenly becomes dangerous when the objective is to reduce the cost of fuel, transport and food for ordinary Nigerians?
“That is not economic principle.
“That is selective compassion,” he said.
Mr Atiku said the central objective of his proposal was to lower domestic production costs while ensuring that the savings were passed on to consumers.
“Our proposal is clear: support domestic production, reduce the cost of crude going into Nigerian refineries, protect legitimate refinery margins and ensure that lower production costs translate into lower costs for Nigerians,” he said.
He further accused the Presidency of attacking a version of his policy that he said did not exist.
“The Presidency should stop inventing a policy for me and then attacking the fiction it created,” Mr Atiku said.
“We have been clear from the beginning.
“We are restoring subsidy through a production model.
“We are proposing a production subsidy, not an import subsidy.
“We are not proposing to subsidise petrol refined abroad.
“We are not proposing to force Dangote or any other Nigerian refinery to sell below cost,” he said.
Rather, he said the proposal was to provide targeted support for crude refined locally so that Nigerian refineries could compete more effectively, expand capacity, create employment and sell fuel at more affordable prices.
“We are proposing targeted support for crude refined here in Nigeria so that domestic refineries can produce more competitively, expand capacity, create jobs and sell fuel at a price Nigerians can better afford,” he said.
Mr Atiku challenged the Presidency to engage his proposal on its merits rather than allegedly misrepresenting it.
“If the Presidency wants a debate, let us have the debate.
“But let it first stop lying about what we are proposing,” he said.
He maintained that Dangote Refinery’s warning ultimately reinforced rather than undermined the rationale behind his proposed production subsidy.
“Dangote is right that a refinery should not be forced to carry the burden of an artificially imposed price.
“We agree.
“Nigerians are also right that the present cost of fuel, transportation, food and doing business has become unbearable.
“Our production subsidy answers both concerns,” he said.
According to Atiku, the policy would protect refinery viability while lowering the cost of producing fuel domestically.
“It protects refinery viability while reducing the cost of producing fuel in Nigeria,” he said.
He said Nigerians now faced a choice between maintaining the existing system or adopting a model that would deliberately lower domestic production costs.
“That is the choice before the country: continue with a system in which Nigerians pay more and government merely explains their suffering, or move to a production model that deliberately lowers costs and puts money back into people’s pockets.
“We choose production.
“We choose Nigerian refining.
“We choose Nigerian jobs.
“We choose affordability,” he said.
Mr Atiku concluded by restating the central message of his proposed policy: “Subsidise Nigerian production, not foreign importation. Produce here. Refine here. Create jobs here. Pay less here.
“That is the Atiku production subsidy model, and no amount of propaganda from the Tinubu Presidency can change what it is.”
