Atiku Unveils New Petroleum Subsidy Model to Boost Domestic Refining

By Nafiu Muhammad Lema

Former Vice President and presidential candidate of the African Democratic Congress (ADC), Atiku Abubakar, has unveiled a new petroleum subsidy model aimed at supporting domestic refining while reducing energy costs for Nigerians.

Atiku, in a statement issued by his Senior Special Assistant on Public Communication, Phrank Shaibu, said the proposal under his Atiku Economic Recovery Plan (AERP) 2027 would replace Nigeria’s previous import-subsidy system with a targeted and capped production subsidy.

He said the proposed model would provide qualifying Nigerian refineries with crude oil at a preferential price, subject to strict conditions on production, efficiency, transparency and domestic supply.

According to him, the subsidy would “follow the barrel”, with every subsidised barrel tracked from crude allocation through refining to the final delivery of petroleum products to Nigerian consumers.

Atiku said refinery operators would not be allowed to benefit from cheaper crude without passing the corresponding savings to consumers.

He explained that crude allocation, refinery intake, production yields, inventories and domestic deliveries would be independently verified, while refineries that divert subsidised crude or products, manipulate records or fail to meet domestic supply obligations would lose eligibility and face sanctions.

The ADC presidential candidate also proposed an annual fiscal ceiling for the programme, to be approved through the federal budget.

He said the approach would ensure that government knows its maximum exposure before providing support, while the National Assembly and the public would have access to the relevant appropriations and audited records.

Atiku further proposed that the subsidy should have a statutory sunset clause and be progressively reduced as domestic refining capacity expands, refinery utilisation improves, competition increases and production costs decline.

He said the ultimate objective was not to create a permanent subsidy regime but to use temporary support to develop a competitive domestic refining industry capable of operating without government intervention.

“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.

The former vice president also criticised President Bola Tinubu’s handling of petroleum subsidy removal, arguing that Nigerians deserved greater clarity over petroleum-related expenditures recorded in government accounts after the subsidy was declared removed in May 2023.

Atiku specifically cited figures from NNPCL’s audited financial statements, which he said recorded about ₦4.84 trillion in Energy Security Expenses in 2023 and ₦7.13 trillion in 2024.

He questioned whether such expenses included under-recoveries, pricing differentials or other petroleum supply-related costs, arguing that Nigerians deserved a clear explanation of their economic substance.

“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 said.

Atiku also raised questions over what he described as approximately ₦30 trillion reflected across Federation revenues, deductions, savings, transfers and related classifications.

He stressed that he was not alleging that the entire amount represented fuel subsidy or had been stolen, but called for a month-by-month public reconciliation of the funds.

He urged the federal government to publish details of deductions, beneficiaries, transfers, balances and the legal authority for each transaction.

Atiku said any previous subsidy transactions found through due process to involve fraud or diversion should be subjected to prosecution and asset recovery.

He described his proposed approach as a contrast to the current administration’s policy, saying his model would “target it, cap it, budget it, track it, audit it” and progressively reduce the intervention as domestic refining capacity grows.

The proposal, he said, was designed to ensure that any public support for the petroleum sector produces measurable benefits for Nigerian consumers and the wider economy.