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 domestic refineries, warning that the policy could weaken government revenue and distort the market.
Dare said selling federation crude to local refiners at discounted or preferential prices would create an immediate shortfall in government earnings and potentially affect allocations to the three tiers of government.
He made his position known on Wednesday through a post on his X handle, following Atiku’s renewed declaration that he would restore fuel subsidy if elected president in 2027.
Atiku, who is the presidential candidate of the African Democratic Congress, had on Tuesday reaffirmed his commitment to reinstating the subsidy, saying the country had sufficient resources to cushion the impact of high fuel prices on citizens.
His position came after his media aide, Paul Ibe, appeared to suggest that the proposed subsidy would eventually be phased out as economic conditions improved.
Ibe had explained that Atiku’s plan would involve supplying crude oil to domestic refiners at subsidised prices to enable them to produce petrol and diesel more cheaply.
“The crude oil will be sold at a discounted price, subsidised to refiners, and that will enable refiners to be able to produce fuel and diesel at a cheap cost,” Ibe said.
He added that cheaper production would allow refiners to sell petroleum products at lower prices while providing temporary relief to consumers and supporting economic activity.
Atiku, however, subsequently clarified that his position was to restore subsidy, distancing himself from Ibe’s suggestion that the intervention would be gradually withdrawn.
“Earlier, one of my press aides contradicted me in a policy statement as far as subsidy is concerned,” Atiku said.
“I want to repeat categorically that when I said I would return to subsidy, I will!”
Responding to the proposal, Dare said the key issue was who would ultimately bear the cost of selling crude below its market value.
He argued that federation crude sold at preferential prices would mean lower revenue for the Federation Account, with possible consequences for funding by the federal, state and local governments.
“Selling federation crude below market price creates an immediate fiscal hole in the Federation Account,” Dare said.
He maintained that the resulting revenue loss could affect expenditure on critical areas such as schools, hospitals and security.
The presidential aide also warned that preferential access to crude could distort competition within Nigeria’s emerging refining industry.
According to him, such a system could favour certain refiners, create artificial monopolies and undermine smaller indigenous modular refineries.
He further argued that the arrangement could conflict with the deregulation provisions of the Petroleum Industry Act.
Dare also raised the prospect of a return to widespread fuel smuggling if subsidised domestic prices create a substantial gap between petrol prices in Nigeria and neighbouring West African countries.
He said such a disparity would make cross-border arbitrage profitable and difficult to prevent, regardless of monitoring mechanisms put in place.
“This idea is an economic safari. Applying painkillers to a festering wound,” he said.
The disagreement comes more than three years after President Tinubu announced the removal of petrol subsidy during his inauguration on May 29, 2023.
The Federal Government has maintained that ending the subsidy was necessary to reduce the strain on public finances and redirect resources towards development.
Atiku, on the other hand, has repeatedly criticised the policy, arguing that its consequences have contributed to the rising cost of living and placed additional pressure on Nigerian households.
The latest exchange between both camps is expected to further intensify the debate over fuel subsidy as political parties and presidential aspirants begin to shape their economic programmes ahead of the 2027 general election.
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