Atiku vs subsidy: Experts urge FG to cushion economic pain

Energy experts and economists have endorsed former Vice President Atiku Abubakar's proposal to review Nigeria's petrol subsidy policy. They are urging President Bola Tinubu's administration to introduce targeted measures to cushion the economic hardship resulting from the subsidy's removal. However, these experts cautioned against a complete reinstatement of the previous subsidy regime, emphasizing the need for transparency, accountability, and proper implementation of any intervention.

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Nigerians had not sufficiently benefited from the savings generated by the removal of the subsidy.

The experts argued that while subsidy removal was a necessary step, the Federal Government has not adequately managed its consequences, leading to escalating costs for petrol, transportation, and essential goods. Atiku Abubakar, the presidential candidate for the African Democratic Congress, recently suggested returning petrol subsidies if elected in 2027. He argued that Nigerians have not sufficiently benefited from the savings generated by the subsidy's removal.

Abubakar's proposed intervention would be targeted, capped, budgeted, time-bound, and independently audited. Its objective would be to support domestic production and shield consumers from excessive petrol price fluctuations. He noted that the economic conditions have significantly changed since the subsidy's removal in May 2023, necessitating a reassessment of existing policies. His plan includes providing domestic crude at preferential prices to qualifying refineries, subject to strict conditions on production, efficiency, transparency, and domestic supply.

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The proposal would be targeted, capped, budgeted, time-bound and independently audited, with the objective of supporting domestic production and shielding consumers from excessive petrol price shocks.

The proposal has sparked debate, with the Federal Government and the ruling All Progressives Congress (APC) opposing the idea. They warned that restoring the subsidy would reintroduce the fiscal pressures, distortions, and economic uncertainties that led to its initial abandonment. The APC National Chairman, Prof Nentawe Yilwatda, and Information Minister Mohammed Idris criticized Abubakar's plan, with the APC describing it as a display of ignorance that could undermine current economic gains.

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It was a display of ignorance and that the proposal could erode current economic gains.