Presidency Slams Atiku Over Fuel Subsidy Reversal, Says Policy Is Incoherent

ABUJA — The Presidency has accused former Vice President and ADC presidential candidate, Alhaji Atiku Abubakar, of political posturing over his renewed call for the restoration of petrol subsidy.

It said Atiku had given Nigerians conflicting explanations of his proposed subsidy policy within a week, describing the situation as evidence of policy inconsistency.

The Presidency also accused the former vice president of “suffering from a lack of basic understanding of his newfound policy prescription.”

Atiku had previously pledged to restore fuel subsidy if elected president, saying the move would help cushion the hardship faced by Nigerians.

His aide, Paul Ibe, subsequently clarified on Tuesday that Atiku would restore the subsidy before eventually phasing it out.

But another aide, Phrank Shaibu, later described Ibe’s explanation as an “unauthorised and misleading characterisation” of Atiku’s position.

According to Shaibu, Atiku would not commit to a fixed date for ending the subsidy. Instead, it would remain in place until domestic refining capacity increased, fuel supply stabilised, competition deepened and market conditions allowed consumers to access affordable prices without government intervention.

However, Atiku later stepped in and reaffirmed his original position.

Reacting to the development in a statement yesterday, Special Adviser to the President on Information and Strategy, Bayo Onanuga, said: “Within a week, Nigerians have heard three different explanations of what an Atiku administration would do about petrol subsidy. The confusion has now become impossible to ignore.”

Onanuga said the former vice president’s intervention effectively overruled Shaibu’s clarification, as Atiku maintained that his position “has not changed.”

Atiku was quoted as saying: “I will restore targeted subsidy and put purchasing power back in the hands of Nigerians.”

The Presidency said the conflicting explanations represented “a serious policy contradiction”, questioning why Atiku’s aides had offered different interpretations of his position before he eventually reaffirmed the initial proposal.

“Nigerians deserve clarity, not policy by trial and error,” the statement said.

The Presidency also challenged the economic basis of Atiku’s proposal, arguing that petrol prices are influenced by several factors beyond government subsidy.

It listed international crude oil prices, exchange rates, refining costs, transportation, distribution and other market costs as key factors determining pump prices.

While acknowledging that competition could improve efficiency and reduce margins, Onanuga said it could not protect Nigeria completely from movements in global crude oil prices and other production costs.

The Presidency also criticised what it described as an oversimplification of the relationship between petrol prices and food inflation.

It noted that although energy and transportation costs influence food prices, Nigerians had experienced food inflation even during periods when petrol subsidies were still being paid.

It identified agricultural productivity, insecurity, exchange rates, logistics, storage, flooding, input costs, money supply and supply constraints as additional factors responsible for rising food prices.

Onanuga said a serious economic programme should tackle those structural issues rather than blame the entire cost-of-living crisis on petrol prices.

The Presidency consequently challenged Atiku to provide details of his proposed “targeted subsidy”, including its projected cost, beneficiaries, funding source and the economic conditions that would determine its eventual removal.

“Nigerians cannot afford another opaque and potentially costly subsidy regime dressed up in new language,” it said.

The statement urged Atiku to demonstrate that he had “a coherent, costed, and workable petroleum policy” rather than “simply playing politics with a policy that has significantly restored fiscal health to the three tiers of government and stabilised the macroeconomic environment.”

“The economy is too serious for policy somersaults, incoherence, destructive populism and election gimmicks,” Onanuga said.

The Presidency further questioned Atiku’s proposal to link subsidy to the price of a barrel of crude oil, noting that petrol represents only about 45 per cent of the products derived from a refined barrel.

It said the remaining products include aviation fuel, kerosene, diesel, petrochemical feedstocks, asphalt, hydrocarbon gas liquids, lubricants, waxes, petroleum coke and sulphur.

According to the Presidency, diesel accounts for roughly 25 per cent of a barrel and was deregulated by the Obasanjo-Atiku administration in 2004. Jet fuel and kerosene account for about nine per cent, while the two products were deregulated in 2009 and subsidies removed in 2016.

The statement added that approximately 10 to 15 per cent of a barrel produces ingredients used to make synthetic rubber, nylon, polyester and plastics, while asphalt accounts for about two to four per cent.

Hydrocarbon Gas Liquids, such as propane and butane, account for about four per cent, while lubricants and waxes make up roughly one to two per cent.

Onanuga asked whether Atiku intended to subsidise all the other products derived from crude oil as well, particularly kerosene used by low-income households and diesel used by homes and factories to power generators and by businesses for transportation.

He also questioned whether refineries receiving discounted crude would be allowed to profit from the other 55 per cent of products while government subsidy was concentrated on petrol.

The Presidency concluded by accusing Atiku of being “definitely suffering from a lack of basic understanding of his newfound policy prescription.”

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