The African Democratic Congress (ADC) has rejected the Presidency’s argument that its presidential candidate, Atiku Abubakar’s proposal to reduce fuel prices through a production subsidy could cost Nigeria about N19.1 trillion annually. It said the figure was based on assumptions by the Presidency.

The ADC said in a statement yesterday by its National Publicity Secretary, Bolaji Abdullahi, that the Presidency was attacking a subsidy model it constructed rather than Atiku’s proposal.

The opposition party pointed out that the N19.1 trillion estimate by the presidency was based on assumptions that crude would sell at about $80 per barrel and that government would subsidise a $40-per-barrel differential.

The ADC challenged the Presidency to demonstrate the basis for the calculation, stressing that Atiku had not proposed a permanent $40-per-barrel subsidy.

Under the proposed model, the government would set a benchmark crude price at the beginning of each budget cycle, linked to a targeted maximum domestic price for petroleum products.

Government intervention would apply only where the market price exceeded the benchmark and would be subject to a fiscal ceiling.

The party said the model would therefore shift petroleum support from Nigeria’s former import-based subsidy regime to a production-linked intervention aimed at expanding domestic refining.

“While the old model spends foreign exchange importing petroleum products, the Atiku model seeks to conserve foreign exchange by producing those products locally,” the ADC said.

It said the scheme would track crude from allocation to refinery intake, production and domestic distribution, backed by verified refinery capacity, audited output, digital tracking, domestic-supply obligations and penalties for diversion. The party also challenged the Presidency to explain the cost and value of its own petroleum-related interventions.

It cited NNPC’s audited 2024 accounts, which recorded about N7.13 trillion under “Energy Security”, while broader petroleum-related expenditures and receivables amounted to roughly N17.5 trillion, depending on the accounting categories.

The ADC stressed that it was not equating the figures with conventional petrol subsidy but said Nigerians deserved to know what the expenditures represented, what they delivered and their economic value.

It also cited the Federal Government’s Deep Offshore Oil and Gas Projects Incentives (Tax Remission) Order 2026, which provides production tax credits of up to $11.50 per barrel for qualifying projects.

The party questioned why the government could offer upstream production incentives to attract investment while dismissing a controlled production incentive for domestic refineries as economically irresponsible.

It similarly referred to import-duty exemptions approved by the Nigeria Customs Service, reportedly valued at about ₦34 trillion, while acknowledging that the figure represented approved exemptions rather than direct government expenditure.

According to the ADC, the exemptions demonstrate that government already recognises that foregoing revenue can be justified where it produces broader economic or social benefits.

The party further argued that the Presidency’s ₦19.1 trillion estimate failed to account for potential foreign-exchange savings from increased domestic refining.

It said greater local production would reduce petroleum imports, retain more value within the economy, potentially generate export earnings and ease pressure on foreign exchange.

The ADC said the impact of fuel prices should also be measured beyond the pump, noting their effects on transportation, food distribution, agriculture, manufacturing, construction, logistics and household purchasing power.

It challenged the government to calculate not only the projected fiscal cost of Atiku’s proposal but also the economic cost of the current system, including higher transport and food distribution costs, foreign-exchange demand and reduced industrial competitiveness.

The party maintained that Atiku’s proposal was not a return to the former subsidy regime, which it acknowledged was vulnerable to opacity, import arbitrage and unverifiable claims.

Instead, it said the proposed intervention would be capped, audited and traceable, tied directly to domestic production and progressively phased down as local refining became competitive.

The ADC said the central question was not whether government should intervene in the petroleum sector, but what it should subsidise, why and for whose benefit.

“What Nigerians need is cheaper fuel, because Nigerians are too poor not to be subsidised. Nigerian crude should create Nigerian value for Nigerians,” it said.

The party challenged the Presidency to explain why an upstream production incentive of up to $11.50 per barrel was economically defensible while a controlled domestic-refining incentive aimed at lowering fuel prices was not.

It said Nigerians deserved a coherent economic policy rather than what it described as a political talking point.

“If the Presidency truly believes that even such an intervention is too expensive, then it must answer the question it has so far avoided: why is cheaper energy for Nigerians less deserving of public investment than the other multi-trillion-naira expenditures that this government has made?” the ADC asked. (The Nation)