The Nigerian Presidency has dismissed a proposed domestic petrol production subsidy put forward by former Vice President Atiku Abubakar, describing it as a “dangerous mathematical fantasy” that the country lacks the crude oil reserves to fund.
In a statement issued on Sunday, Special Adviser to the President on Media and Public Communications, Sunday Dare, strongly rejected criticisms made by Mr Atiku, who ran as the African Democratic Congress presidential candidate, regarding the government’s energy pricing policy.
Mr. Atiku had criticized a recent 30-day discount offered by state oil firm NNPC Retail and a temporary price modulation framework, labeling them “panic-driven gimmicks” and claiming the administration had mishandled economic reforms.
Responding to the allegations, the Presidency argued that Nigeria’s physical crude production constraints make a direct production subsidy unfeasible.
Crude availability and market realities
Citing Minister of Finance and Coordinating Minister of the Economy Taiwo Oyedele, the Presidency noted that while Nigeria produces approximately 1.8 million barrels of crude oil per day, long-standing joint ventures and production sharing contracts significantly reduce the volume available directly to the state.
“To propose a blanket ‘targeted production subsidy’ on crude without the physical, unencumbered volume to back it up is pure economic illiteracy,” Mr. Dare said, adding that unencumbered equity crude available to the state sits at fewer than 700,000 barrels per day.
The statement noted that major domestic facilities, including the Dangote Petroleum Refinery, require more feedstock than the government can freely supply without breaching existing international supply agreements—forcing domestic refiners to import a portion of their crude.
Temporary price ceiling defended
The Presidency also defended NNPC Retail’s decision to offer a temporary discount on petrol to cushion international crude price spikes, denying that the move represented a return to fuel subsidies.
According to the administration, a negotiated interim ceiling of ₦1,350 per litre on ex-gantry costs acts as a “structural shock absorber” rather than a price control mechanism. Under the arrangement, refiners and importers absorb short-term cost surges above the ceiling, recovering expenses when global crude prices cool or foreign exchange rates adjust.
“N1,400 today and N1,400 tomorrow provides far greater economic stability than N1,500 today and N1,300 tomorrow,” Mr. Dare stated, pointing out that erratic price swings create transport fare inflation that burdens consumers.
The administration outlined accompanying energy initiatives, including the expansion of Compressed Natural Gas (CNG) as an alternative fuel, naira-denominated crude sales to local refiners, and the implementation of strategic petroleum reserves to stabilize domestic supply.
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