The Presidency has challenged former Vice President Atiku Abubakar to provide the full fiscal and legal details of his proposed petroleum subsidy policy, warning that Nigeria cannot afford a return to an opaque system that could undermine public finances.

Special Adviser to the President on Information and Strategy, Bayo Onanuga, said any proposal to reintroduce subsidy must answer fundamental questions about its cost, funding source and impact on federal, state and local government revenues.

Responding to Atiku’s proposal for a new subsidy model, Onanuga recalled that the previous subsidy regime placed enormous pressure on the Nigerian National Petroleum Company Limited (NNPCL), with millions of barrels of crude pledged against loans used to finance subsidy arrangements.

He said that by 2024, NNPCL had reached a critical financial position and owed suppliers billions of dollars.

According to the Presidency, the central question Nigerians should ask is who would ultimately pay if subsidy were restored.

“If the subsidy is restored, who pays for it? What will the new pump price be? N200 or N500?” Onanuga asked.

He argued that if petrol were sold substantially below what he put at an economic cost of between N1,200 and N1,300 per litre, the difference would have to be absorbed somewhere within the public finances.

Such a cost, he said, could translate into reduced spending on infrastructure and social services, lower allocations to states and the 774 local government councils, increased borrowing and higher public debt.

The Presidency, however, acknowledged the severe pressure that petrol prices and associated transportation costs place on Nigerian households and businesses.

Onanuga said the Tinubu administration was pursuing alternatives aimed at reducing energy costs, including the promotion of Compressed Natural Gas (CNG), which he described as about 70 per cent cheaper than petrol.

He noted that companies including Dangote and BUA had introduced CNG-powered trucks into their fleets, arguing that commercial transporters should similarly embrace cheaper energy alternatives and pass the resulting savings to consumers.

“There is no disagreement that the cost of petrol places enormous pressure on Nigerian households and businesses. The hardship created by higher energy and transportation costs is real,” he said.

The Presidency maintained, however, that sustainable relief should not involve recreating a fiscal arrangement capable of again placing severe pressure on the economy.

It argued that attention should instead be focused on leveraging Nigeria’s growing domestic refining capacity, improved regulation of the petroleum sector and greater competition to achieve more stable and affordable energy prices.

Onanuga said political promises must be subjected to “fiscal arithmetic”, adding that although Atiku was entitled to propose a different economic direction, his proposal should be accompanied by specific answers.

He asked how much the subsidy programme would cost annually, what revenue source would finance it and whether the government would borrow to fund the intervention.

The Presidency also questioned whether implementing Atiku’s proposal would require amendments to the Petroleum Industry Act and existing petroleum-sector regulations, and what safeguards would be introduced to prevent abuses associated with previous subsidy arrangements.

With Nigeria substantially increasing domestic petrol production, Onanuga said Atiku should also explain precisely what component of the petroleum value chain his proposed subsidy would cover.

“Now that Nigeria has substantially increased domestic petrol production, what precisely would the proposed subsidy be subsidising—the cost of local production, transportation and distribution, or some other component of the petroleum value chain?” he asked.

The Presidency warned against policies whose financial consequences could remain hidden from Nigerians only to emerge later in the form of increased debt, reduced government spending on social services and additional pressure on the naira.

It nevertheless welcomed debate over Nigeria’s cost-of-living crisis and economic policy, but insisted such discussions must reflect the realities of the country’s changing petroleum industry.

“We urge all political actors, including Alhaji Atiku Abubakar, to present Nigerians with the full fiscal and legal implications of any proposal to restore fuel subsidy,” Onanuga said. (AriseNews TV)

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