*** Says proposal raises questions over funding, pump-price controls and compliance with PIA

The Presidential Campaign Council of the All Progressives Congress (APC) has challenged former Vice President Atiku Abubakar to provide details of the legal, fiscal and operational framework for his proposed subsidy on locally refined petrol.

The council, in a statement issued on Sunday by its spokesman, Dele Alake, said Atiku’s proposal for a “production subsidy” to reduce petrol prices raised questions about how the intervention would operate within the Petroleum Industry Act (PIA) 2021.

Atiku, who is the presidential candidate of the African Democratic Congress (ADC), has reaffirmed his intention to restore a targeted petrol subsidy if elected president in 2027. In August, he said his position had not changed and that he would “restore it”, arguing that the policy would cushion Nigerians from rising fuel, transport and food costs.

Alake, however, said the proposal required clarification, particularly on whether refiners benefiting from the intervention would be required to sell petrol at government-prescribed prices.

He said the issue was important because the PIA provides for market-determined wholesale and retail prices of petroleum products.

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) also said on Saturday that petrol pump prices were determined by market forces and that the regulator did not fix prices under the PIA, except where statutory conditions for intervention were met.

“Any proposed intervention must therefore clearly identify the legal mechanism through which the subsidy would translate into lower pump prices,” Alake said.

He added that if refiners were not required to pass the benefit of the subsidy to consumers, government support could reduce their production costs without necessarily guaranteeing lower prices at filling stations.

The APC council also asked Atiku to disclose the estimated cost of the proposed intervention and its source of funding.

According to Alake, Atiku had previously suggested that the policy could involve supplying crude oil to domestic refineries at preferential prices. He argued that any discount granted on crude for domestic refining would have implications for government revenue.

The council said the cost of the proposed intervention could be substantial, depending on the volume of crude or petrol covered, the size of the discount and the scope of the scheme.

It consequently challenged Atiku to provide details of the proposed subsidy rate, annual spending limit, volume of crude or petrol to be covered, funding source, mechanism for passing the benefit to consumers and safeguards against diversion, smuggling and fraudulent claims.

It also asked whether amendments to the PIA would be required to implement the proposal.

“An appropriation by the National Assembly may authorise expenditure, but it would not by itself resolve every regulatory question arising under the Petroleum Industry Act,” Alake said.

The APC council further questioned what it described as a shift in Atiku’s position on downstream petroleum deregulation.

It cited his 2022 campaign position, when Atiku described the petrol subsidy regime as fraudulent and pledged to complete its removal. The statement also recalled that Atiku has since publicly reaffirmed his intention to restore a targeted subsidy if elected.

The council said Atiku should explain how the proposed arrangement would differ from the previous subsidy regime and how it would address concerns historically associated with fuel subsidy administration.

It also recalled that downstream petroleum reforms predated the current administration, noting that diesel and aviation fuel had been moved towards market pricing during the Olusegun Obasanjo administration, in which Atiku served as vice president.

On the current administration’s response to high energy and transportation costs, the APC council highlighted the Federal Government’s investment in compressed natural gas (CNG) and electric mobility.

President Bola Tinubu said on Saturday that more than 120,000 vehicles had been converted to CNG over the past three years, while more than 400 certified conversion centres and over 90 CNG refuelling stations were operating nationwide.

Tinubu also said the Federal Government and the 36 state governors had agreed to work towards measurable reductions in transportation costs from October 1 through the National Affordable CNG Transit Programme.

According to the President, CNG-powered and electric transport services in some states were already offering lower fares. He cited fares of between N50 and N100 on some routes in Borno, compared with commercial fares of between N300 and N600, while passengers on the Suleja-Abuja route in Niger State were paying N550 against about N800 charged by commercial operators.

Tinubu said the government’s strategy was aimed at reducing Nigeria’s exposure to international energy-price shocks by expanding the use of cheaper domestic gas and alternative-energy transport.

The APC council said the government would continue to pursue these alternatives rather than return to the previous petrol subsidy model.

It also argued that increased domestic refining capacity would strengthen the deregulated downstream market, citing the Dangote Petroleum Refinery’s stated capacity of 650,000 barrels per day.

The council acknowledged the pressure that higher petrol prices have placed on households and businesses, but said any intervention should be legally grounded, transparent and properly costed.

It further said the recent rise in global crude oil prices had contributed to pressure on domestic petrol and diesel prices, adding that a reduction in international crude prices could ease pump prices.

The council said the NMDPRA was also working with relevant agencies on issues including alleged price gouging and the diversion of petroleum products across Nigeria’s borders.

Alake urged Atiku to publish a detailed policy document setting out the legal and fiscal basis of his proposed subsidy, as well as the mechanism through which the intervention would benefit consumers.

“Every proposed intervention in the downstream sector must be lawful, transparent, properly costed and capable of delivering measurable benefits to consumers,” he said.

The APC council maintained that until such details were provided, questions would remain over the proposed subsidy’s cost, legal framework and ability to guarantee lower petrol prices.