Petrol Subsidy: Presidency Rejects Atiku’s Plan, Says No Going Back

The Presidency has ruled out any return to the petrol subsidy regime, insisting that the Federal Government will not reverse the policy despite renewed calls by African Democratic Congress (ADC) presidential candidate Atiku Abubakar for government intervention to reduce the cost of petrol.

The renewed disagreement has pushed fuel subsidy removal back to the centre of Nigeria’s political debate ahead of the 2027 presidential election, with the Tinubu administration defending the reform while Atiku argues that Nigerians have borne the brunt of higher fuel prices without receiving sufficient benefits from the savings generated by the policy.

The Presidency said there would be no going back to the old subsidy system, arguing that restoring it would undermine the economic reforms introduced by President Bola Ahmed Tinubu and could weaken investment in Nigeria’s emerging domestic refining industry.

The government’s position followed Atiku’s renewed advocacy for a form of petrol subsidy, which his camp says would be targeted at domestic production rather than a return to the opaque system that previously consumed huge public funds.

Atiku had earlier pledged to restore petrol subsidy if elected president in 2027. His spokesman, Paul Ibe, subsequently explained that the proposed intervention would initially be used to support households and businesses, revive economic activity and improve productivity before being gradually phased out.

Atiku has argued that the immediate priority should be to reduce the pressure that high petrol prices have placed on households, businesses and the wider economy.

His position has evolved into a proposal for a more targeted intervention linked to domestic production. Under the proposed framework, government support would be directed towards crude supplied to Nigerian refineries in order to lower the cost of locally produced petrol rather than returning to the previous broad subsidy structure.

The proposal has nevertheless attracted criticism from the Federal Government and supporters of the current market-based approach.

The Presidency maintains that subsidy removal was necessary because the former system placed an unsustainable financial burden on the government and created opportunities for abuse.

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President Tinubu announced the removal of petrol subsidy on May 29, 2023, shortly after taking office, declaring that the subsidy was gone.

The decision immediately triggered a sharp increase in petrol prices and contributed to higher transportation and logistics costs, with the effects spreading across food prices and other areas of the economy.

The Federal Government, however, has consistently argued that the policy freed resources that would otherwise have continued to finance petrol consumption rather than infrastructure and public services.

According to figures cited by the government, the removal of the subsidy generated N15.8 trillion in resources for the federation between June 2023 and December 2025.

The government says the resources strengthened the finances of the federal, state and local governments and created additional fiscal space for public spending.

Critics, however, have questioned whether the financial gains have translated sufficiently into improvements in the living standards of ordinary Nigerians.

That disagreement is at the heart of the emerging 2027 fuel subsidy debate.

Atiku has argued that Nigerians should be able to see tangible benefits from the money saved by the removal of subsidy, particularly in the areas of transportation, food prices, electricity, healthcare, education and employment.

The former vice-president has also called for accountability over funds previously spent under the subsidy regime, insisting that anyone who diverted public money should be held responsible.

The Presidency, meanwhile, argues that reversing the policy would create uncertainty for investors who have committed billions of dollars to Nigeria’s downstream petroleum sector.

The government has particularly pointed to the expansion of domestic refining capacity, including the Dangote Refinery, as evidence that the petroleum sector is gradually moving away from dependence on imported refined products.

The Dangote Refinery has continued to expand its operations and has announced plans to increase its processing capacity significantly as it ramps up production.

The refinery has also increased its purchases of Nigerian crude, strengthening its position as a major supplier of refined petroleum products to the domestic market.

The development has strengthened the government’s argument that Nigeria should allow the domestic refining industry to grow under a market-oriented petroleum pricing system.

The Presidency fears that a return to government-controlled petrol prices could distort the market and discourage private investment in refineries.

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The government has also maintained that the country cannot sustainably return to a situation where public funds are used to bridge the difference between the market cost of petrol and an artificially lower pump price.

The debate is further complicated by changing conditions in the global oil market and Nigeria’s increasing domestic refining capacity.

Industry groups have also highlighted the potential benefits of the post-subsidy environment, particularly the increased role of local refineries and changes in the downstream petroleum market.

Atiku’s camp, however, insists that a carefully designed intervention does not necessarily mean a return to the old subsidy regime.

Paul Ibe has said an Atiku administration would use the intervention as a temporary measure while working towards conditions that would eventually make subsidy unnecessary.

Atiku has also sought to distinguish his proposal from the subsidy arrangement that existed before 2023, arguing for a production-based subsidy that would support domestic refining and help bring down the cost of petrol for consumers.

The disagreement has therefore shifted from a simple question of whether subsidy should exist to a broader debate over how petrol should be priced, who should bear the cost and whether government should intervene in the market.

For the Tinubu administration, the priority is to sustain subsidy removal, increase domestic refining and allow market forces to determine petroleum prices.

For Atiku, government intervention may be necessary to cushion consumers and businesses while Nigeria builds a more productive and competitive economy.

The issue has become particularly politically sensitive because petrol remains a major driver of transportation and logistics costs in Nigeria.

When petrol prices rise, the effects are felt by commercial transport operators, manufacturers, farmers, traders and households.

The high cost of moving goods from farms and factories to markets also contributes to broader inflationary pressure, making the fuel-price debate inseparable from the wider cost-of-living crisis.

The Federal Government has responded with alternative energy and transport initiatives, including efforts to expand compressed natural gas (CNG) use as a cheaper alternative to petrol and diesel for transportation.

The administration has argued that such measures are intended to reduce Nigerians’ dependence on petrol and gradually soften the impact of the subsidy removal.

But opposition parties and critics continue to argue that the pace of relief has not matched the scale of the hardship caused by higher energy and transportation costs.

The issue is consequently expected to feature prominently in political campaigns as parties present competing economic programmes to Nigerian voters ahead of 2027.

For now, the Presidency has made its position clear: there will be no return to the old petrol subsidy regime under the Tinubu administration.

Atiku, meanwhile, continues to defend a targeted intervention that his camp says would reduce petrol prices, support domestic production and eventually be phased out.

The competing positions are likely to keep petrol subsidy removal, fuel prices and domestic refining at the centre of Nigeria’s economic and political debate as the country moves closer to the 2027 presidential election.

Petrol Subsidy: Presidency Rejects Atiku’s Plan, Says No Going Back