In a statement issued on Thursday, Special Adviser to the President on Information and Strategy, Bayo Onanuga, argued that restoring the subsidy would require Nigerians to confront fundamental questions about its funding, legality and implementation within the country’s transformed petroleum market.
The Presidency has criticised former Vice President Atiku Abubakar’s proposal to restore petrol subsidy, describing it as a costly reversal of Nigeria’s ongoing petroleum-sector reforms and questioning its fiscal sustainability.
Onanuga noted that Atiku had previously supported the removal of fuel subsidy but had now reversed his position, which he described as politically motivated ahead of the 2027 general election.
The Presidency maintained that the former subsidy regime was not a simple government discount but a system in which public finances absorbed the gap between the regulated pump price and the actual cost of supplying petrol, creating significant fiscal pressures and opportunities for abuse.
It further argued that the Petroleum Industry Act established a framework for ending the subsidy regime by the end of June 2023, with President Bola Tinubu accelerating the process by only a few weeks.
According to the statement, Nigeria’s petroleum landscape has also changed substantially since 2023, particularly with the emergence of large-scale domestic refining capacity. The Presidency said increased local refining has created opportunities to reduce dependence on imported petroleum products, conserve foreign exchange and strengthen domestic industrial capacity.
It therefore questioned what a renewed subsidy would actually finance in the current market, asking whether it would cover local production, transportation, distribution or another component of the petroleum value chain.
Onanuga warned that selling petrol below its economic cost would ultimately transfer the burden to public finances through reduced funding for infrastructure and social services, lower allocations to states and local governments, increased borrowing or higher public debt.
The Presidency acknowledged the hardship caused by higher energy and transportation costs but said sustainable relief should focus on reducing production and transportation costs rather than reviving what it described as an opaque and fiscally burdensome subsidy system.
It cited the Federal Government’s promotion of compressed natural gas (CNG) as an alternative, noting that CNG can significantly reduce fuel costs for taxis, private vehicles and distribution fleets.
The statement challenged Atiku and other political actors advocating subsidy restoration to provide Nigerians with clear fiscal and legal details, including the annual cost of the programme, its proposed funding source, whether borrowing would be required, and how subsidy payments would be protected from the abuses associated with the former regime.
The Presidency said Nigeria’s economic debate should be anchored in the realities of its evolving petroleum sector rather than a return to the conditions of the past.
“Political promises must be backed by fiscal arithmetic,” the statement said, urging proponents of subsidy restoration to explain how the policy would be financed without undermining the country’s fiscal stability.
