Special Adviser to President Bola Tinubu on Media and Public Communication, Sunday Dare, has rejected former Vice-President Atiku Abubakar’s proposal to subsidise crude oil supplied to local refineries, warning that the policy could deprive governments of revenue and encourage fuel smuggling.
Dare made the criticism in a post on his X handle on Wednesday, shortly after Atiku reaffirmed his plan to restore fuel subsidy if elected president in 2027.
Atiku, the presidential candidate of the African Democratic Congress, had said Nigeria was wealthy enough to subsidise petroleum products and support citizens amid rising living costs.
However, Dare argued that selling crude owned by the federation to local refiners below the market price would create an immediate shortfall in government revenue.
“Selling federation crude below market price creates an immediate fiscal hole in the Federation Account, directly slashing allocations to federal, state, and local governments for schools, hospitals, and security,” he said.
The presidential aide further warned that preferential crude allocations could distort competition in the domestic refining industry and undermine smaller indigenous refineries.
“Preferential crude allocations risk creating artificial monopolies, destabilising smaller indigenous modular refiners, and violating the clear deregulatory provisions of the Petroleum Industry Act,” Dare said.
He also raised concerns that subsidised crude could create a significant price disparity between Nigeria and neighbouring countries, making the country vulnerable to renewed cross-border fuel smuggling.
“Any regime that creates a wide gap between Nigerian pump prices and neighbouring West African markets guarantees a return of cross-border fuel arbitrage,” he said.
Dare described Atiku’s proposal as an economic policy that could offer short-term relief while creating deeper structural problems.
“This idea is an economic safari. Applying painkillers to a festering wound,” he added.
Atiku had on Tuesday reaffirmed that he would restore subsidy if elected, after his media aide, Paul Ibe, suggested that the policy would be gradually phased out as the economy improved.
Atiku subsequently disowned Ibe’s position, insisting that the proposed intervention remained part of his policy.
“I want to repeat categorically that when I said I would return to subsidy, I will! Nigeria is rich enough to look after the welfare of its citizens,” Atiku said.
Ibe had explained that Atiku’s proposed arrangement would involve selling crude to domestic refiners at discounted prices, allowing them to produce petrol and diesel more cheaply while selling the products at prevailing pump prices.
The controversy has renewed the political debate over fuel subsidy, which Tinubu announced had been removed during his inauguration on May 29, 2023.
While the Tinubu administration has defended the removal as necessary to improve government finances, Atiku has argued that it has worsened the cost of living for Nigerians.
