The African Democratic Congress (ADC) has rejected the Presidency’s characterization of former Vice President Atiku Abubakar’s proposal to bring petrol prices down to about N600 per litre, insisting that the plan should not be confused with Nigeria’s former fuel subsidy regime.
The party said the proposal was designed as a controlled production incentive for domestic refineries, with the objective of reducing the cost of petroleum products for consumers while encouraging greater investment in local refining.
The controversy followed criticism from the Presidency, which reportedly argued that implementing the proposal could impose a significant financial burden on the Federal Government.
However, the ADC said the government’s assessment did not sufficiently take into account the structure of Atiku’s proposal, its proposed fiscal limits and the potential economic benefits that could arise from cheaper domestically refined petroleum products.
ADC Rejects N19.1 Trillion Cost Estimate
ADC National Publicity Secretary, Bolaji Abdullahi, faulted the Presidency’s argument, particularly the projected N19.1 trillion cost associated with the proposal.
Abdullahi said the figure did not properly reflect the mechanics of the proposal or the broader economic implications of reducing petrol prices through increased domestic refining.
“We are at a loss how the presidency conjured up this phantom figure. But we do not agree with it,” he said.
According to the ADC spokesman, Atiku’s proposal would operate within a defined fiscal limit, while mechanisms would be introduced to monitor crude oil from the point it enters a refinery through to the production of finished petroleum products.
The party argued that such safeguards would distinguish the proposal from the previous subsidy arrangement, which it said had been criticized for its cost, lack of transparency and susceptibility to abuse.
Party Says Proposal Is Different From Old Subsidy Regime
The ADC maintained that the Presidency was effectively attacking the shortcomings of the old fuel subsidy system rather than addressing the specific structure of Atiku’s proposal.
The party said its proposed approach would be capped, monitored, audited and traceable, with the incentive directly linked to domestic production rather than an open-ended payment mechanism.
The distinction, according to the party, is important because the objective is not simply to make petrol artificially cheap but to create conditions under which Nigerian refineries can process locally available crude and supply petroleum products to the domestic market at more affordable prices.
The ADC said increasing domestic refining capacity could also reduce Nigeria’s dependence on imported petroleum products.
ADC Questions Oil Sector Incentives
The party also questioned what it described as an apparent contradiction in the government’s approach to incentives within the petroleum sector.
Abdullahi referred to production-linked fiscal incentives available to some oil producers, including incentives that can reach $11.50 per barrel for offshore production.
He questioned why a similarly controlled incentive designed to support domestic refining and reduce fuel costs for consumers should automatically be dismissed.
“If Nigeria can provide a production-linked fiscal incentive of up to $11.50 per barrel to stimulate offshore oil production, why is a carefully controlled crude-input incentive for domestic refineries dismissed as economic madness when its objective is to make fuel cheaper for Nigerians and build domestic refining capacity?” he asked.
The ADC said incentives in the oil sector should be evaluated according to their economic objectives, transparency and measurable outcomes rather than being rejected solely because they involve some form of government intervention.
High Petrol Prices and Cost of Living
Beyond the debate over subsidy policy, the ADC argued that the economic consequences of maintaining high petrol prices must also be included in any assessment of government policy.
The party said expensive petrol affects virtually every part of the Nigerian economy because transportation, agriculture, manufacturing, logistics and small businesses depend heavily on petroleum products.
Higher transport costs can increase the cost of moving food from farms to urban markets, while manufacturers and businesses that rely on fuel for power generation face increased operating expenses.
According to the party, these pressures ultimately feed into household expenditure and contribute to the broader cost-of-living crisis.
The ADC therefore argued that the government should consider not only the direct fiscal cost of reducing petrol prices but also the potential economic cost of keeping prices high.
Domestic Refining at the Centre of the Debate
The argument has also placed Nigeria’s domestic refining capacity at the centre of the fuel-price debate.
For years, Nigeria remained heavily dependent on imported refined petroleum products despite being one of Africa’s major crude oil producers.
Increased domestic refining has therefore become an important part of efforts to reduce exposure to international fuel markets, import costs and foreign-exchange pressures.
The ADC believes that a carefully structured incentive for domestic refineries could help accelerate this transition.
The party said increased local refining could potentially reduce petroleum imports, conserve foreign exchange and create additional economic activity within Nigeria.
It argued that the benefits could extend beyond petrol prices to employment, industrial development, logistics and investment in the downstream petroleum sector.
ADC Calls for Debate Based on Economic Impact
The party maintained that the debate over Atiku’s N600 petrol proposal should be based on its actual structure and potential economic impact rather than simply comparing it with the former subsidy regime.
It said any intervention should have clear limits, transparent accounting procedures and mechanisms for tracking crude supplies and refined products.
The ADC’s position is that reducing petrol prices through a controlled domestic-refining incentive could provide relief to consumers while simultaneously strengthening Nigeria’s refining industry.
The Presidency and supporters of the current fuel-pricing policy, however, have raised concerns about the fiscal implications of interventions in the petrol market.
As the debate continues, the central question is whether Nigeria can design a transparent and financially sustainable mechanism that delivers more affordable fuel without recreating the problems associated with the previous subsidy system.
For millions of Nigerians facing high transportation, food and business costs, the issue remains particularly significant. The outcome of the policy debate could have far-reaching implications for household finances, businesses and the wider Nigerian economy.