The Presidency has rejected former Vice President Atiku Abubakar’s proposal to restore petrol subsidy, warning that it could put fresh pressure on public finances and undermine investment in domestic refining.
Special Adviser to the President on Information and Strategy, Bayo Onanuga, says any proposal to restore the subsidy must explain how much it would cost and how it would be funded.
The Presidency says Nigeria’s petroleum market has changed significantly since petrol subsidy was removed in 2023.
It argues that increasing domestic refining capacity has altered the structure of fuel supply and raised questions about what exactly would be subsidised under a new arrangement.
Presidential spokesman Bayo Onanuga says the previous system required government to cover the difference between the cost of supplying petrol and the regulated pump price.
He says returning to that system could increase pressure on public finances and foreign exchange.
The Presidency also argues that restoring subsidy could discourage investment and undermine domestic refining.
Onanuga says while Atiku Abubakar is entitled to propose an alternative policy, he should explain its financial and legal implications.
Among the questions raised by the Presidency are the likely annual cost, where the money would come from and whether government would have to borrow to fund it.
The Presidency acknowledges that higher petrol and transport costs have placed pressure on households and businesses.
But it says the government is pursuing alternatives, including the expansion of Compressed Natural Gas, rather than returning to the previous subsidy system.
The Presidency maintains that proposals to restore petrol subsidy should be accompanied by clear calculations showing how they would be financed and sustained.
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Editor..Ada Ononye
