The Independent Media and Policy Initiative (IMPI) has dismissed claims by former Vice President Atiku Abubakar that the Federal Government’s 30-day petrol price discount is a disguised return to fuel subsidy, insisting that the intervention is fundamentally different from the opposition politician’s proposed production subsidy.

The policy think tank said the government’s measures to cushion the impact of the Middle East conflict on fuel prices were market-driven interventions designed to absorb global price shocks without imposing additional financial burdens on the national treasury.

In a policy statement signed by its Chairman, Dr Omoniyi Akinsiju, IMPI argued that the Nigerian National Petroleum Company Limited (NNPCL) was offering temporary relief by sacrificing its commercial retail profit margins, rather than relying on direct government payments to petroleum marketers.

The group said Atiku’s criticism of the 30-day discount as a “panic-driven stunt” reflected a misunderstanding of the policy’s objectives and implementation framework.

Atiku had questioned the ability of a 30-day intervention to address structural inflation and provide relief to motorists who purchase petrol outside NNPCL retail stations.

But IMPI maintained that the 30-day period was a controlled trial to monitor market movements, inflationary pressures and supply-chain leakages before the government adjusted or extended the intervention.

It said the arrangement would also allow authorities to review maximum gantry prices in response to changing market conditions.

“The policy is an agile, data-driven intervention designed to act as a shock absorber against a severe global price spike, rather than a return to a broken subsidy system,” the group said.

IMPI explained that the distinction between the two approaches lay in how the cost of intervention would be financed.

According to the group, the NNPCL discount involves foregoing commercial profit margins to sell petrol at landing cost, while Atiku’s proposal would require the government to pay refinery owners the difference between production costs and an agreed domestic price.

It argued that the latter would create a direct fiscal obligation for the government, potentially placing additional pressure on public finances.

The group also defended the proposed N1,350-per-litre ceiling on petrol’s ex-gantry or landing cost, describing it as a price-smoothing mechanism rather than a rigid price control.

It said the ceiling would be determined through an economic formula and reviewed at the end of each 30-day period.

Comparing the two approaches, IMPI said the Tinubu administration’s model relied on market-linked forward pricing, with crude oil transactions tied to international benchmarks but converted at agreed naira rates or negotiated landing-cost targets.

The think tank warned that the former vice-president’s model could undermine government revenue and discourage investment in the petroleum sector.

It argued that supplying crude oil below its economic value would impose significant opportunity costs on the Federation Account, while compulsory discounts on crude belonging to international oil companies and private joint-venture partners could trigger contractual disputes and investor uncertainty.

IMPI further warned that forcing oil companies to sell crude at government-mandated discounts could lead to costly international arbitration and discourage fresh investment in Nigeria’s oil and gas industry.

The group said such a policy could also prompt international operators to redirect exploration funds to countries with more predictable investment environments, potentially slowing domestic production and development.

It attributed Nigeria’s previous difficulty in securing final investment decisions on new oil and gas projects to an unfavourable investment climate, arguing that the Tinubu administration had begun to reverse the trend.