Former Vice President and presidential candidate of the African Democratic Congress (ADC), Atiku Abubakar, has unveiled his proposed petroleum subsidy model, promising to replace Nigeria’s former import-based system with a targeted production subsidy if elected president in 2027.
Atiku said the proposed model under his Atiku Economic Recovery Plan (AERP) 2027 would be capped, budgeted, independently audited and designed to support domestic refining while reducing energy costs for Nigerians.
In a statement issued by his Senior Special Assistant on Public Communication, Phrank Shaibu, Atiku said the debate should not be limited to whether Nigeria should have a subsidy or not, but rather how government intervention could be structured to deliver measurable benefits without creating room for waste.
“My proposal is not to resurrect the old subsidy regime. We will move subsidy from importation to production, from middlemen to Nigerian refineries, and from unverifiable claims to verifiable barrels.
“The principle is simple: the subsidy will follow the barrel.”
Under the proposed scheme, qualifying public and private refineries would have access to domestic crude at a preferential price, provided they meet specified production, efficiency, transparency and domestic supply requirements.
Atiku acknowledged that selling crude below its market-equivalent value would create an opportunity cost for the Federation, but said his administration would openly account for the cost.
“The cost will be known. The ceiling will be known. The beneficiaries will be known. And, most importantly, the benefit delivered to Nigerians will be measurable.
“We will determine what Nigeria can afford before we subsidise. We will not subsidise first and discover the bill afterwards.”
Subsidised crude must benefit consumers
Atiku said the proposed policy would prevent refinery owners from retaining the benefits of cheaper crude without passing them on to consumers.
He said refineries receiving subsidised crude would be required to supply independently verified quantities of petroleum products to the Nigerian market under a transparent pricing formula that reflects the benefit of the preferential crude price.
He added that crude allocation, refinery intake, production yields, inventories and domestic deliveries would be reconciled to ensure that every subsidised barrel could be traced from allocation to the final consumer.
“No phantom cargoes. No fictitious imports. No unverifiable under-recoveries. No retrospective claims.
“If you receive subsidised Nigerian crude, you must refine it in Nigeria, supply the agreed products to Nigerians and pass the benefit to Nigerians. Otherwise, you do not qualify.”
According to Atiku, eligibility would be based on independently verified refinery capacity, efficiency, domestic supply and compliance rather than political connections.
He said the scheme would also contain safeguards against the diversion of subsidised crude and petroleum products to more profitable foreign markets.
Operators found diverting subsidised crude or products, manipulating production records, violating domestic supply obligations or failing to pass the prescribed benefits to consumers would lose eligibility, refund the subsidy benefit and face regulatory and legal sanctions.
“Nigeria will not subsidise anybody’s private profit. Public support must produce a measurable public benefit,” he said.
Atiku proposes subsidy ceiling
Atiku said the proposed production subsidy would operate within a predetermined annual fiscal ceiling approved through the federal budget.
“No refinery gets unlimited support. No marketer brings government a surprise bill. No agency manufactures an under-recovery after the transaction.
“The National Assembly will see the appropriation. Nigerians will know the maximum exposure. Independent auditors will see the barrels. And the public will see what was produced for every naira of support.”
He said any additional oil revenue above the budget benchmark could be deployed within the established fiscal ceiling, subject to legal appropriation.
According to him, the framework would also disclose the opportunity cost of the subsidy and its implications for revenues accruing to the federal, state and local governments.
Subsidy to be gradually phased out
Atiku said the proposed intervention would have statutory sunset and periodic review provisions.
He explained that subsidy per barrel would progressively decline as domestic refining capacity expands, refinery utilisation improves, competition increases and production costs fall.
“Our objective is not permanent subsidy. It is to use temporary and disciplined support to build a refining industry strong enough eventually not to need subsidy.
“We will measure the fiscal cost against refinery output, domestic prices, jobs, investment and benefits delivered to consumers. If the policy is not delivering value greater than its cost, it must be adjusted or terminated.”
Atiku said the plan would ultimately reduce petrol and diesel costs, with lower transportation and energy expenses expected to benefit farmers, manufacturers, traders and other businesses.
“The ultimate objective is not merely cheaper petrol. It is cheaper transportation, cheaper food, stronger businesses, more Nigerian jobs and greater purchasing power.
“Nigeria’s crude should first help build Nigerian refining capacity and Nigerian prosperity.”
Atiku questions Tinubu’s subsidy removal
The former vice president also criticised President Bola Tinubu’s handling of fuel subsidy removal, arguing that the government had not adequately explained petroleum-related expenses recorded after the President announced the end of subsidy.
Atiku recalled that Tinubu declared during his inauguration at Eagle Square on May 29, 2023, that “subsidy is gone”, saying Nigerians subsequently faced higher petrol, transportation and food prices.
“But after Nigerians paid that price, the government’s own accounts created questions that President Tinubu has still not satisfactorily answered,” he said.
Atiku cited NNPCL’s audited financial statements, which he said recorded approximately ₦4.84 trillion in Energy Security Expenses in 2023 and ₦7.13 trillion in 2024.
He demanded an explanation of the economic substance of the expenses and whether they included under-recoveries, pricing differentials or other petroleum supply costs.
“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.
“You cannot abolish subsidy at Eagle Square and allow subsidy-like costs to resurface in government accounts without explaining the contradiction.”
He added that Nigerians should not be made to bear market-level pump prices while Federation resources continue to absorb petroleum-related costs that have not been adequately explained.
“Nigerians cannot pay for subsidy removal twice — through punishing pump prices and through unexplained subsidy-like costs against their commonwealth.”
Atiku demands reconciliation of ₦30tn
Atiku also raised questions over approximately ₦30 trillion in Federation revenues, deductions, savings, transfers and related funds, which he said required a complete public reconciliation.
He clarified that he was not alleging that the entire amount represented fuel subsidy or had been stolen.
“Let nobody misrepresent the argument. We are not saying ₦30 trillion is fuel subsidy or that ₦30 trillion has been proven stolen.
“We are saying that approximately ₦30 trillion reflected across Federation revenues, deductions, savings, transfers and related classifications requires a complete, month-by-month public reconciliation.”
Atiku called on Tinubu to explain the source and destination of the funds, including deductions, beneficiaries, transfers, balances and the legal authority for the transactions.
“Publish every deduction. Identify every beneficiary. Show every transfer. Show every balance. Show the legal authority.
“If the money is properly accounted for, open the books and end the argument.”
He also pledged that previous subsidy transactions would be subjected to lawful scrutiny, with anyone found through due process to have fraudulently obtained or diverted public funds facing prosecution and asset recovery.
“Anyone who stole subsidy money should prepare to return it. But we will not replace one opaque system with another.”
Atiku said his proposed approach would be based on setting the intervention, establishing a fiscal ceiling, appropriating funds, tracking crude, verifying production, guaranteeing consumer benefits and gradually reducing the subsidy as domestic refining capacity grows.
“Tinubu’s approach was: announce first, impose the pain immediately, and explain the accounts later.
“Ours will be: define the intervention, establish the ceiling, appropriate the money, track the crude, verify the production, guarantee the consumer benefit, publish the accounts and progressively reduce the subsidy.
“That is the Atiku alternative: Target it. Cap it. Budget it. Track it. Audit it. Make Nigerians feel the benefit. Reduce it as domestic production grows. And ultimately, end the need for it altogether.”
Titilope Adako is a talented and intrepid journalist, dedicated to shedding light on the untold stories of Osun State and Nigeria. Through incisive reporting, she tackles a broad spectrum of topics, from politics and social justice to culture and entertainment, with a commitment to accuracy, empathy, and inspiring positive change.
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