APC Challenges Atiku To Explain Legal, Fiscal Basis Of Petrol Subsidy Plan

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

The APC-PCC, in a statement issued on Sunday by its spokesman, Dele Alake, said Atiku’s proposal raised questions about how the scheme would operate under the Petroleum Industry Act (PIA) 2021 and how it would guarantee lower petrol prices for consumers.

The statement followed Atiku’s recent call for a reduction in the pump prices of petrol and diesel and his proposal to subsidise locally refined petrol.

The APC-PCC said the former vice president must explain whether refineries benefiting from the proposed subsidy would be required to sell petrol at a prescribed price.

According to the council, Section 205(1) of the PIA provides for wholesale and retail petroleum prices to be determined under unrestricted free-market conditions.

This position is consistent with a statement issued on Saturday by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), which said it does not fix petrol pump prices or issue administrative price templates.

The regulator said government intervention was restricted to exceptional circumstances involving a formally declared market failure, adding that no such market failure had been declared.

The APC-PCC said Atiku should therefore identify the legal framework that would enable government to impose a price condition on refiners if his proposal is intended to guarantee cheaper petrol.

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

The campaign council also demanded details of the proposed subsidy’s cost and funding mechanism.

It said Atiku’s earlier comments suggested that the intervention could involve preferentially priced crude for domestic refineries, adding that any discount could reduce revenue accruing to the Federation and consequently affect allocations to the federal, state and local governments.

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

It asked Atiku to disclose the proposed subsidy rate, annual spending ceiling, volume of crude or petrol covered, funding source, mechanism for guaranteeing lower pump prices, safeguards against diversion and smuggling, and whether amendments to the PIA would be required.

The council also questioned Atiku’s current position in relation to his previous support for downstream deregulation.

It recalled that Atiku had described the petrol subsidy system as fraudulent in November 2022 and pledged to complete its removal, but said he announced on August 25, 2026, that he would “restore it.”

The APC-PCC said Atiku should explain why he now favoured restoring subsidy in another form and how the proposed arrangement would avoid the problems associated with the former subsidy regime.

The council further contrasted Atiku’s proposal with the Tinubu administration’s emphasis on CNG and electric mass transit as alternatives for reducing transportation costs.

It cited government figures showing that more than 120,000 vehicles had been converted to CNG and said commuters in seven states and the Federal Capital Territory were already benefiting from lower fares on routes operated with CNG and electric buses.

The APC-PCC said the Tinubu administration would continue with what it described as a deregulated petroleum market while supporting measures aimed at reducing transportation costs and expanding domestic refining.

It also cited the Dangote Petroleum Refinery’s 650,000-barrel-per-day nameplate capacity as evidence of increased domestic refining investment.

The council acknowledged the pressure created by higher petrol prices but said market developments, including global crude oil prices, remained important factors in domestic pump prices.

It called on Atiku to publish a detailed policy document alongside an independent legal and fiscal analysis of his proposal.

“Every proposed intervention in the downstream sector must be lawful, transparent, properly costed and capable of delivering measurable benefits to consumers,” the APC-PCC said.

The council was also critical of Atiku’s understanding of the current petroleum regulatory framework, urging him to study the PIA before advancing the proposal.