APC-PCC Challenges Atiku to Explain Legal, Fiscal Bases of His Subsidy Proposal

•Says new cost can be as high as N21tr annually

Adedayo Akinwale in Abuja 

The All Progressives Congress (APC) Presidential Campaign Council (PCC), has challenged the presidential candidate of the African Democratic Congress (ADC), Atiku Abubakar, to explain the legal and fiscal bases of his petrol subsidy proposal.

The former vice-president had recently proposed  “production subsidy” for locally refined petrol, which he said would reduce pump prices. 

However, the APC PCC Spokesman, Dele Alake, in a statement said Atiku’s proposal raised important legal, fiscal and practical questions that he must answer.

He explained that Section 205(1) of the Petroleum Industry Act 2021 provided that unrestricted free-market conditions shall determine wholesale and retail prices of petroleum products. 

Alake recalled that the Nigerian Midstream and Downstream Petroleum Regulatory Authority, in a statement on Saturday, explained that it neither fixed pump prices nor issued administrative price templates, except where the statutory conditions for intervention were met. 

The agency maintained that the PIA provisions guide its function, saying at the moment, “No such market failure has been declared.”

Alake, therefore, stressed that Atiku should explain whether a refinery receiving his proposed subsidy would be required to sell petrol at a prescribed price.

“If the answer is yes, he should identify the legal framework under which the government would impose that price condition and explain how it would operate consistently with the Petroleum Industry Act.

“If the answer is no, he should explain how public support to refiners would guarantee lower prices at filling stations. Without an enforceable mechanism, refiners could receive the benefit while consumers continued to pay market prices,” he said.

The spokesperson noted that Atiku must also disclose the cost of his proposal and how he would fund it.

Alake said Atiku’s earlier statement suggested that the intervention could take the form of preferentially priced crude for domestic refineries. 

He added that any discount on crude would reduce the value accruing to the Federation and, consequently, the revenue available to the federal, state and local governments, triggering afresh the fiscal crisis that made 27 states unable to pay salaries and pensions before President Tinubu assumed office in 2023.

Alake said based on publicly reported refinery throughput and domestic petrol-supply figures, the cost of the new subsidy could run as high as N17 or N21 trillion annually, depending on the discount size, the volume covered, and whether the support applies to the entire barrel or only to petrol sold domestically.

He emphasised that the assumptions must be clearly defined, saying Nigerians deserved to know the proposed subsidy rate, annual spending ceiling, volume of crude or petrol to be covered, source of funding, mechanism guaranteeing lower pump prices, safeguards against diversion, smuggling and fraudulent claims, and whether amendments to the Petroleum Industry Act would be required.

Alake argued that an appropriation by the National Assembly might authorise expenditure, but it would not by itself resolve every regulatory question arising under the Petroleum Industry Act, saying if Atiku intended to amend the law, he should say so plainly.

The spokesman was of the opinion that Atiku’s latest position must also be reconciled with his previous support for downstream deregulation. 

He recalled that in November 2022, at the Lagos Business School, Atiku described the petrol subsidy system as fraudulent and pledged to complete its removal. 

Alake said the former vice-president reminded his audience that he chaired the committee that removed its first and second phases, and promised to complete the process. 

However, he said on 25 August,  2026, he announced on X, “I will restore it!”

Alake added: “He must explain why he now advocates restoring subsidy in another form and how his proposed arrangement would avoid the abuse, scarcity, smuggling and fiscal losses associated with the old system.

“Deregulation of the downstream petroleum sector began under the Obasanjo-Atiku administration. Diesel—which powers food trucks, generators and factories—was deregulated in June 2003. 

“Aviation fuel also moved to market pricing under the same administration. The Buhari administration deregulated kerosene in 2016. Petrol was the last major product retained under the old subsidy regime, which was scheduled to end in June 2023 under the PIA.

“Nigeria spent about two decades developing the PIA. The reform process began in 2000, during the first term of the administration in which Atiku served as Vice President. He should therefore explain how his new proposal aligns with the legal and regulatory framework that emerged from that process.”

Alake said President Tinubu’s administration has instead focused on expanding lower-cost alternatives through compressed natural gas and electric mass transit. 

These programmes, he explained, were already reducing transport costs on routes served by CNG and electric buses, while vehicle conversions and supporting infrastructure continue to expand nationwide.

He revealed that the government has converted more than 120,000 vehicles to CNG, with thousands more converted privately, adding that the administration was working with state governments to extend these savings nationwide.

Alake added that President Tinubu recalled the programme he agreed with the governors of the 36 states on August 27.

“From October 1, more Nigerians should begin to see measurable reductions in transportation costs. 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.

“In Borno State, the services charge between ₦50 and ₦100 on routes where commercial operators charge between ₦300 and ₦600.

“Passengers on the Suleja–Abuja service in Niger State pay ₦550 instead of about ₦800. Kaduna’s free CNG buses carried more than 1.4 million passengers in five months of 2025, saving residents an estimated ₦1.39 billion in fares.

“Alternative-energy transport in Adamawa State has reduced fares by as much as 50 per cent, while Abia State has deployed 40 electric buses and 20 charging stations,” Alake noted.

In contrast, he stressed that Atiku was reaching into Nigeria’s past with another subsidy scheme that would enrich smugglers in particular. 

He said President Tinubu urged Nigerians to ignore politicians who wanted to drag the country back to the subsidy era. 

According to him, “That road leads to mounting debt, petrol queues, payments pocketed by smugglers and cheap Nigerian fuel subsidised for the whole of West Africa.

“Nigeria will continue to move forward with a deregulated market that has supported increased investment in domestic refining. 

“The Dangote Petroleum Refinery has reached its nameplate capacity of 650,000 barrels per day and reportedly achieved 700,000 barrels per day during performance tests. 

“The company has also launched an initial public offering targeting ₦2.1 trillion for expansion.”

Alake said the council acknowledged the pressure that higher petrol prices placed on Nigerian families, saying the Tinubu administration would continue to implement policies to support our people. Petrol sold for about ₦830 per litre before the Middle East crisis pushed crude oil prices above $100 per barrel.

He said a de-escalation of the crisis could help reduce crude oil prices and, consequently, the pump prices of petrol and diesel, not just in Nigeria, but worldwide.  

Alake further noted that the NMDPRA was working with the Federal Competition and Consumer Protection Commission against price-gouging and with the Nigeria Customs Service against the diversion of petroleum products across the borders.