Why Atiku’s subsidy plan is flawed - Tinubu’s aide

Sunday Dare, Special Adviser to President Bola Tinubu on Media and Public Communication, has strongly criticized a proposal by presidential candidate Atiku Abubakar to subsidize crude oil supplied to local refineries. Dare asserted that the plan would lead to fiscal and market distortions, ultimately harming government revenue and the broader economy.

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Who Pays the Bill? Selling federation crude below market price creates an immediate fiscal hole in the Federation Account, directly slashing allocations to federal, state, and local governments for schools, hospitals, and security.

Dare argued that selling federation crude at preferential prices to local refineries would create an "immediate fiscal hole" in the Federation Account. This reduction in revenue, he explained, would directly impact allocations for essential services like schools, hospitals, and security at federal, state, and local government levels. He also warned that such preferential allocations could foster artificial monopolies and destabilize smaller indigenous refiners, contradicting the deregulatory provisions of the Petroleum Industry Act (PIA).

Furthermore, Dare cautioned that creating a significant price gap between Nigerian pump prices and those in neighboring West African markets would inevitably encourage the return of cross-border fuel smuggling. He dismissed the proposal as an "economic safari" and likened it to applying "painkillers to a festering wound."

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The Return of Smuggling: Any regime that creates a wide gap between Nigerian pump prices and neighbouring West African markets guarantees a return of cross-border fuel arbitrage, no matter how many ‘auditors’ are promised.

Atiku Abubakar, however, reaffirmed his stance on restoring fuel subsidies if elected president in 2027. He explicitly disowned earlier statements by one of his media aides suggesting a gradual phase-out of subsidies. "I want to repeat categorically that when I said I would return to subsidy, I will! Nigeria is rich enough to look after the welfare of its citizens," Atiku stated, emphasizing that his position remained unchanged.

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I want to repeat categorically that when I said I would return to subsidy, I will! Nigeria is rich enough to look after the welfare of its citizens. Let it be clearly stated that he was not speaking on my own authority.