Atiku Clears Air on Subsidy Return Following Dangote Refinery’s Warning

Former vice president and presidential candidate of African Action Congress (ADC), Atiku Abubakar, has clarified that his proposed petrol subsidy would target domestic production rather than compel refineries to sell fuel below cost, following a warning by Dangote Refinery over possible government intervention in fuel pricing.

Atiku, through his Senior Special Assistant on Public Communication, Phrank Shaibu, said the position expressed by Dangote Refinery in its prospectus for its proposed initial public offering did not contradict his proposal.

Dangote Refinery had warned that any reintroduction of fuel subsidies, price controls or similar government interventions could affect domestic pricing dynamics and refining margins.

The company said such interventions could also make it more difficult to predict the relationship between international crude oil prices and domestic refined-product prices, potentially affecting its profitability.

Reacting, Atiku argued that Dangote’s concern was specifically against being forced to absorb losses through arbitrary pump-price controls, rather than against government support for domestic refining.

“Dangote raised a legitimate business concern. The Presidency turned it into a campaign of fear,” Atiku said.

He explained that his proposal was based on a production subsidy, which he said was fundamentally different from the import subsidy system previously used by successive governments.

According to him, an import subsidy uses public funds to support petrol refined outside Nigeria and subsequently imported into the country, while a production subsidy would lower the cost of crude supplied to qualifying Nigerian refineries.

“Import subsidy spends public money supporting petrol refined abroad and brought into Nigeria. Production subsidy supports crude refined here in Nigeria so that Nigerian refineries can produce fuel more cheaply and Nigerians can pay less,” he said.

Atiku said his proposed model would provide support through a transparent and capped mechanism, with independent verification, while ensuring that refineries retained legitimate operating costs and a reasonable commercial margin.

“There is a clear difference between helping a producer reduce costs and forcing that producer to sell at a loss,” he said.

The former Vice President accused the Presidency of deliberately presenting his proposal as an attempt to impose an arbitrary pump price on private refineries.

He insisted that his administration would not fix a politically convenient petrol price and transfer the resulting financial burden to domestic refiners.

“You cannot announce a politically convenient petrol price and quietly dump the cost on the refinery. That is not policy. That is confiscation by another name,” Atiku said.

He further outlined safeguards he said would accompany the proposed production subsidy, including a firm fiscal ceiling, a maximum support level per barrel, independent verification of crude supplied under the scheme, electronic tracking of crude intake and refined output, domestic supply obligations and independent audits.

He also proposed severe penalties for diversion and fraudulent claims.

“We will know how many barrels receive support, which refinery receives them, what is produced, what it costs the taxpayer and what benefit Nigerians receive. No mystery barrels. No endless claims. No blank cheques,” he said.

Atiku maintained that protecting the commercial viability of Nigerian refineries was essential to attracting private investment into the country’s downstream petroleum sector.

He said Dangote’s warning should therefore not be interpreted as opposition to measures that reduce production costs, arguing that government intervention could be structured in a way that benefits both refiners and consumers.

“Dangote is right that a refinery should not be forced to carry the burden of an artificially imposed price. We agree. Nigerians are also right that the present cost of fuel, transportation, food and doing business has become unbearable. Our production subsidy answers both concerns,” he said.

Atiku also criticised the Tinubu administration’s economic policies, accusing the government of presenting the hardship caused by rising fuel, transport and food costs as an unavoidable consequence of reform.

He further questioned what he described as the administration’s willingness to provide waivers, tax credits and other incentives to businesses while resisting his proposed mechanism for reducing domestic fuel production costs.

The former Vice President urged the Presidency to engage his proposal on its actual terms rather than opposing what he described as a distorted version of it.

“We are proposing a production subsidy not an import subsidy. We are not proposing to subsidise petrol refined abroad. We are not proposing to force Dangote or any other Nigerian refinery to sell below cost,” he said.

Atiku concluded that the country’s choice should be to strengthen domestic refining, create jobs and reduce production costs rather than continue with a system that leaves consumers bearing the full burden of higher energy costs.

“Subsidise Nigerian production, not foreign importation. Produce here. Refine here. Create jobs here. Pay less here,” he said.