Tinubu responds to Atiku's subsidy pledge
President Bola Tinubu has dismissed former Vice President Atiku Abubakar's pledge to restore Nigeria's fuel subsidy if elected in 2027, describing the proposal as evidence of "serious ignorance" of governance and the economy.
Speaking on Thursday while receiving Ademola Adeleke, the re-elected governor of Osun State, at the State House, Tinubu said: "I saw one of my opponents now say he will go back to subsidy. I read it. That is a demonstration of serious ignorance on governance and economy."
The President defended the removal of the subsidy, which he announced during his inauguration on May 29, 2023, saying it had significantly increased revenues available to the three tiers of government. He argued that the additional resources should be used by states to improve the welfare of Nigerians.
Tinubu also said that before the removal, 27 states were unable to pay salaries. He said: "Before I came here, 27 states were unable to pay salaries, not to even talk of pensioners, salary of workers. In your state, I know a man that I raised… who's nicknamed 'half salary'."
Atiku's proposal and campaign response
Atiku made the subsidy restoration pledge during a Facebook Live session on Wednesday. He said he initially did not oppose the removal but has since changed his position, and questioned where the money saved from the subsidy removal has gone, asking if it was used to improve healthcare, education, or security. He also said he would bring back the oil subsidy and that whoever stole the money must refund it if he is elected.
Kenneth Okonkwo, spokesperson for Atiku's 2027 presidential campaign, dismissed the criticism, saying the proposal is aimed at reducing fuel prices and is not a return to the old subsidy regime. He said the plan, called the Atiku Fuel Affordability Plan (AFAP), is predicated on the availability of domestic refining capacity and government intervention to ensure local refineries obtain crude oil at affordable prices. Okonkwo argued that making crude available to domestic refineries at a fair price would lower production costs and make petrol more affordable.
Okonkwo also said Tinubu misunderstood the policy proposed by Atiku, and noted that the old subsidy regime was associated with corruption because Nigeria relied heavily on imported petrol, alleging that the system created opportunities for manipulation of import volumes and prices.
Presidential aides weigh in
Bayo Onanuga, Special Adviser to the President on Information and Strategy, accused Atiku of being "desperate for power" by reversing his stance on subsidy removal, having been a proponent before the 2023 general elections. Onanuga said the Petroleum Industry Act made the fuel subsidy illegal from the end of June 2023, and that Tinubu only accelerated the removal by weeks.
Onanuga also said there is no N30 trillion subsidy windfall or savings, contrary to Atiku's claim, and that the subsidy was a discount NNPC offered the government, leading to under-recovery of costs and massive losses. He said the economic cost of petrol is about N1,200 to N1,300 per litre.
Onanuga said the Dangote Refinery would not have kickstarted production for local consumption if the subsidy regime were operative, and that restoring the old subsidy system could undermine local refining and place smaller domestic refineries under financial pressure. He said about N15 trillion that would have been borrowed and spent on discounted petrol has now gone to the coffers of the three tiers of government, and that in July the three tiers shared about N3 trillion, a record.
He also said Atiku's proposal would be funded by borrowing, reduced government spending, or increased public debt, and challenged Atiku to explain its cost and funding source.
Sunday Dare, Special Adviser to the President on Media and Public Communications, wrote an opinion piece criticising Atiku's subsidy pledge as political opportunism.
Financial impact of subsidy removal
The federal government recently said about N15.8 trillion had accrued to the country from the subsidy removal, with Taiwo Oyedele, the finance minister, disclosing that N5.4 trillion went to the federal government while N10.4 trillion was shared among state and local governments.
The removal of the fuel subsidy triggered a sharp increase in fuel prices, followed by higher transportation, food, and other living costs. The policy, alongside other economic reforms, including the liberalisation of the foreign exchange market, has significantly increased the cost of living and triggered widespread pressure on households and businesses.
The federal government has maintained that subsidy removal has strengthened public revenues and provided more resources for development across the country.