Tinubu’s Fuel Price Relief Defended as Sunday Dare Faults Atiku’s Subsidy Proposal

By Olumide Bajulaiye

President Bola Tinubu’s 30-day petrol price discount and proposed fuel price modulation framework are economically justified measures to cushion Nigerians against global oil market volatility, the Special Adviser to the President on Media and Public Communications, Sunday Dare, has said.

Dare, in an article titled “Atiku’s Demagoguery in the Face of Tinubu’s Logical Policies,” criticised former Vice President Atiku Abubakar’s opposition to the intervention, arguing that his proposal for a production subsidy fails to account for Nigeria’s crude oil production commitments, contractual obligations and revenue constraints.

The presidential aide maintained that the government’s approach was designed to provide temporary relief from rising fuel prices without returning to the costly petrol subsidy regime abolished in May 2023.

Atiku had criticised the fuel price intervention at a press conference in Abuja, describing the government’s approach as inadequate and proposing an alternative centred on supporting production costs.

Dare, however, argued that the proposal would be difficult to implement without sufficient crude oil volumes under the Federal Government’s direct control.

According to him, Nigeria produces approximately 1.8 million barrels of crude oil daily, but contractual obligations under joint ventures and production-sharing agreements significantly reduce the volume available for direct allocation by the government.

He cited figures presented by Coordinating Minister of the Economy and Minister of Finance, Taiwo Oyedele, to argue that Nigeria has fewer than 700,000 barrels per day of unencumbered crude available to the state.

Dare said a blanket production subsidy could create additional fiscal pressure, undermine transparency and revive some of the problems associated with the former fuel subsidy system.

Why Tinubu’s Fuel Price Intervention Is Different
Explaining the administration’s 30-day petrol discount, Dare said the Nigerian National Petroleum Company (NNPC) Retail had initially introduced the measure as part of activities marking Nigeria’s 66th Independence anniversary before extending it for another month.

He described the intervention as a temporary price-modulation strategy rather than a restoration of the former fuel subsidy.

Under the arrangement, he said, NNPC Retail would forgo its profit margin to sell petrol at landing cost during the intervention period, helping to cushion the impact of rising international crude oil prices on consumers.

Dare also defended the proposed interim ceiling of N1,350 per litre on ex-gantry costs, arguing that the mechanism was intended to moderate sudden increases in fuel prices and transport fares.

He said the ceiling would be reviewed monthly based on cost assessments, while refiners and importers would absorb short-term increases above the threshold and recover the costs when market conditions improve.

According to the presidential aide, the approach would help reduce the risk of sudden petrol price increases translating into higher transport fares that remain elevated even after fuel prices fall.

Government Lists Other Measures to Cushion Nigerians

Dare said the Tinubu administration was pursuing additional measures to reduce the impact of energy costs on households and businesses.

These include expanding compressed natural gas (CNG) infrastructure, promoting domestic refining through naira-for-crude arrangements and establishing strategic energy reserves to strengthen supply during periods of disruption.

He also cited the government’s tax reform programme, measures to address illegal road levies and proposed windfall taxes on energy operators as components of its broader economic response.

According to him, revenue from the proposed windfall tax would support interventions such as transport vouchers and minimum-wage assistance.
Dare maintained that expanding CNG adoption could provide commercial transport operators with a cheaper alternative to petrol, while domestic refining could help reduce exposure to foreign exchange volatility.

Dare Defends Tinubu’s Economic Reforms
The presidential aide also defended the removal of petrol subsidies and the unification of the foreign exchange market, describing them as necessary measures to address longstanding fiscal and monetary distortions.

He argued that the reforms had enabled federal, state and local governments to receive increased allocations through the Federation Account Allocation Committee (FAAC), while eliminating the fuel queues and supply disruptions associated with earlier subsidy arrangements.

Dare further cited cash transfers to vulnerable households, subsidised credit for small businesses, wage support and infrastructure projects as parts of the administration’s efforts to ease economic pressures and promote long-term growth.

He said the government’s policy direction was intended to combine market-based pricing with temporary interventions and longer-term investments in energy infrastructure.

However, the impact of these measures on household purchasing power, transport costs and the overall cost of living remains central to public debate over the administration’s economic policies.
Global Oil Market Pressure

Dare also referenced measures adopted by other countries in response to fluctuations in international energy prices, arguing that governments worldwide were seeking ways to protect consumers from rising costs.

He said Nigeria’s response should be assessed against the realities of global crude oil markets and the country’s production and fiscal constraints.

The presidential aide accused Atiku of presenting an alternative that, in his view, failed to adequately address the financial and operational requirements of a production subsidy.

He maintained that the Tinubu administration’s combination of temporary price relief, market-based reforms and investment in alternative energy sources offered a different approach to managing fuel price volatility.

Dare’s intervention adds to the growing political debate over petrol pricing, subsidy policy and the economic direction of the country ahead of the 2027 general elections.
AI