APC challenges Atiku to explain legal, fiscal basis of petrol subsidy proposal

The All Progressives Congress Presidential Campaign Council (APC-PCC) has challenged former Vice-President Atiku Abubakar to explain the legal, fiscal and operational framework of his proposed production subsidy for locally refined petrol.

The council, in a press statement issued on Sunday by its spokesperson, Dele Alake, said the proposal raised questions about its compatibility with the Petroleum Industry Act (PIA) 2021, its cost to the government and the mechanism for ensuring that consumers benefit from the intervention.

Atiku, the presidential candidate of the ADC in the 2027 presidential election, reiterated his proposal at a press conference in Abuja on Friday, saying a production subsidy for locally refined petrol would reduce pump prices.

The former Vice President also called on President Bola Tinubu to reduce petrol and diesel prices.

However, the APC-PCC argued that Section 205(1) of the PIA provides for wholesale and retail petroleum prices to be determined by unrestricted free-market conditions.

The council cited a Saturday statement by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), which said it does not fix pump prices or issue administrative price templates except when statutory conditions for intervention are met.

According to the council, the regulator said no such market failure had been declared.
The APC-PCC asked Atiku to clarify whether refineries receiving the proposed subsidy would be required to sell petrol at a government-prescribed price.

It said that if the proposal involved price controls, the former vice-president should identify the legal framework for imposing such conditions and explain how they would comply with the PIA.

Conversely, the council said, if refiners were not required to sell at prescribed prices, Atiku should explain how the subsidy would guarantee lower prices for consumers.

“Without an enforceable mechanism, refiners could receive the benefit while consumers continued to pay market prices,” the statement said.

Fiscal implications

The council also questioned how the proposed subsidy would be funded, warning that preferentially priced crude oil for domestic refineries could reduce revenue accruing to the Federation.

It said such a reduction would affect funds available to federal, state and local governments, potentially reviving the fiscal difficulties that left 27 states unable to pay salaries and pensions before Mr Tinubu assumed office in 2023.

The APC-PCC estimated that the proposed intervention could cost between N17 trillion and N21 trillion annually, depending on the size of the discount, the volume covered and whether the subsidy applied to the entire barrel of crude oil or only to petrol sold domestically.

It, however, said the assumptions underlying the estimates needed to be clearly defined.

The council asked Atiku to disclose the proposed subsidy rate, annual spending ceiling, volume of crude oil or petrol to be covered, funding source and safeguards against diversion, smuggling and fraudulent claims.

It also asked him to explain the mechanism for guaranteeing lower pump prices and whether implementing the proposal would require amendments to the PIA.

The statement noted that an appropriation by the National Assembly would authorise expenditure but would not, by itself, resolve all regulatory questions arising under the petroleum law.

Atiku’s previous position

The APC-PCC also questioned the consistency of Atiku’s latest proposal with his previous support for downstream deregulation.

It recalled that, at the Lagos Business School in November 2022, the former vice-president described the petrol subsidy system as fraudulent and pledged to complete its removal.

According to the council, Atiku said at the time that he chaired the committee responsible for removing the first and second phases of the subsidy and that he would complete the process.

The council also cited a post Atiku made on X on 25 August 2026, in which he declared, “I will restore it!”

It challenged him to explain why he now supports restoring the subsidy in another form and how his proposal would avoid the abuse, scarcity, smuggling and fiscal losses associated with the previous system.

The statement traced the deregulation of the downstream petroleum sector to the administration of former President Olusegun Obasanjo, under which Atiku served as vice-president.

It said diesel was deregulated in June 2003, while aviation fuel also moved to market pricing under the administration. Kerosene was deregulated in 2016 under the administration of former President Muhammadu Buhari.

Petrol, the council said, was the last major petroleum product retained under the old subsidy regime, which was scheduled to end in June 2023 under the PIA.

It added that Nigeria’s petroleum industry reform process began in 2000, during the first term of the administration in which Mr Atiku served as vice-president.

Tinubu’s alternative-energy initiatives

The APC-PCC defended the Tinubu administration’s approach to reducing transportation costs, saying it had focused on expanding the use of compressed natural gas (CNG) and electric mass transit.

It said the government had converted more than 120,000 vehicles to CNG, with thousands more converted privately, while working with state governments to expand the programme.

The statement also quoted Mr Tinubu as recalling an agreement reached with the governors of the 36 states on 27 August, under which more Nigerians were expected to begin seeing measurable reductions in transportation costs from 1 October.

According to the council, commuters in seven states and the Federal Capital Territory are already paying between 31 and 83 per cent less on routes served by CNG and electric buses.

It cited Borno State, where bus fares on some routes range from N50 to N100, compared with N300 to N600 charged by commercial operators.

On the Suleja-Abuja route in Niger State, the statement said passengers pay N550, compared with about N800.

It also said Kaduna’s free CNG buses carried more than 1.4 million passengers in the first five months of 2025, saving residents an estimated N1.39 billion in fares.

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The council further cited reductions of up to 50 per cent in transport fares in Adamawa State and the deployment of 40 electric buses and 20 charging stations in Abia State.

It argued that the initiatives offered an alternative to petrol subsidies, which it said could benefit smugglers and expose Nigeria to mounting debt, fuel queues and cross-border diversion of subsidised products.

Domestic refining

The APC-PCC said the Tinubu administration would continue to support a deregulated petroleum market, which it said had encouraged increased investment in domestic refining.

It cited the Dangote Petroleum Refinery’s nameplate capacity of 650,000 barrels per day and its reported achievement of 700,000 barrels per day during performance tests.

The council also noted that the refinery had launched an initial public offering targeting N2.1 trillion to fund expansion.

Acknowledging the pressure of higher petrol prices on households, the APC-PCC said the administration would continue implementing policies to support Nigerians.

It said petrol had sold for about N830 per litre before the Middle East crisis pushed crude oil prices above $100 per barrel.

The council argued that a de-escalation of the crisis could lower crude oil prices and, consequently, petrol and diesel prices in Nigeria and elsewhere.

It added that the NMDPRA was working with the Federal Competition and Consumer Protection Commission to address price-gouging and with the Nigeria Customs Service to prevent the diversion of petroleum products across the country’s borders.

The APC-PCC urged Atiku to publish a detailed policy document and an independent legal and fiscal analysis of his proposal.

Until then, it said, the production-subsidy plan remained an uncosted promise without a clearly identified legal or operational framework.

The council also urged the former vice-president to read the PIA, arguing that his proposal did not adequately reflect the law and current dynamics in the oil sector.