The Presidency has dismissed former Vice President Atiku Abubakar’s proposed production subsidy on petrol as “a dangerous mathematical fantasy wrapped in political deceit,” saying Nigeria does not have the crude oil volumes to fund it.
Special Adviser to the President on Media and Public Communications, Sunday Dare, stated this in a statement on Sunday, titled ‘Atiku’s Demagoguery in the Face of Tinubu’s Logical Policies.’
Dare described the recent press conference in Abuja by Atiku, the African Democratic Congress presidential candidate, as “a seminal example of shallow, election-laced demagoguery.”
Atiku had criticised the 30-day discount on petrol by NNPC Retail and a price modulation framework, which he described as a “panic-driven gimmick,” according to Dare. He had also claimed that President Bola Tinubu copied his economic homework without the production subsidy that made it work.
Dare cited the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, as saying on Channels Television that Nigeria produces about 1.8 million barrels of crude per day for a population of over 200 million.
However, the Presidency said the Federal Government does not directly own all of that oil.
It argued that under joint ventures and production-sharing contracts signed over decades, production costs, royalties and profit-oil sharing ratios “severely reduce the equity crude available to the state,” leaving fewer than 700,000 barrels per day of unencumbered free crude.
“To propose a blanket ‘targeted production subsidy’ on crude without the physical, unencumbered volume to back it up is pure economic illiteracy,” Dare said, adding that, “It invites the very opacity, fraudulent round-tripping, and fiscal haemorrhage that crippled Nigeria for decades under the old subsidy regime.”
The Presidency noted that refineries such as the Dangote Petroleum Refinery need more feedstock than the state can freely supply without breaching international supply contracts, which is why Dangote and other domestic refiners also import crude.
It rejected a comparison of crude allocation with farm produce like garri or cassava, saying it misrepresented commodity markets.
It also pointed to the United States, which it said produces over 10 million barrels per day for 330 million people but sells petroleum at market prices, and Qatar, which it said had to cut energy subsidies significantly despite its large gas reserves and a population of under 500,000.
The Presidency also rejected Atiku’s claim that the NNPC Retail discount amounted to a return to subsidy.
It said NNPC had
