The All Progressives Congress presidential campaign council (APC-PCC) has asked former Vice-President Atiku Abubakar to explain the legal and fiscal basis of his proposed production subsidy for locally refined petrol.
In a statement issued on Sunday, Dele Alake, spokesperson
for the APC-PCC, said Atiku, presidential candidate of the African Democratic
Party (ADC), must explain how the proposal would operate within the Petroleum
Industry Act (PIA), particularly section 205(1), which provides for
market-determined wholesale and retail prices of petroleum products.
Alake’s comment came a day after the Nigerian Midstream and
Downstream Petroleum Regulatory Authority (NMDPRA) said petrol prices are
determined by market forces under the PIA.
Atiku had proposed subsidising crude supplied to local
refineries to reduce the cost of petrol and said the intervention would support
domestic production rather than revive the former import-based subsidy regime.
However, the APC presidential campaign council asked the
former vice-president to clarify whether refineries receiving the proposed
subsidy would be required to sell petrol at a prescribed price.
“If the answer is yes, he should identify the legal
framework under which the government would impose that price condition and
explain how it would operate consistently with the Petroleum Industry Act,” the
statement reads.
“If the answer is no, he should explain how public support
to refiners would guarantee lower prices at filling stations.”
The NMDPRA said on Saturday that it does not fix petrol pump
prices or issue administrative price templates except where statutory
conditions for intervention are met, adding that no such market failure had
been declared.
The APC-PCC also challenged Atiku to disclose how much the
proposed intervention would cost and how it would be funded.
Alake said preferentially priced crude for domestic
refineries would reduce the value accruing to the federation account and,
consequently, the revenue available to the federal, state and local
governments.
“Based on publicly reported refinery throughput and domestic
petrol-supply figures, the cost of the new subsidy could run as high as N17 or
N21 trillion annually, depending on the discount size, the volume covered, and
whether the support applies to the entire barrel or only to petrol sold
domestically,” he said.
He asked Atiku to disclose the proposed subsidy rate, annual
spending limit, volume covered, funding source and safeguards against
diversion, smuggling and fraudulent claims.
Alake also asked whether implementing the proposal would
require an amendment to the PIA.
ATIKU’S POSITION ON SUBSIDY
Atiku has repeatedly called for government intervention to
reduce petrol prices, arguing that higher fuel costs have increased
transportation, food and business expenses.
In August, the ADC presidential candidate said he would
restore petrol subsidy if he were elected in 2027, arguing that the government
had failed to account for savings from its removal.
He later clarified that his proposal would be a production
subsidy rather than the former import-based arrangement.
Under the plan, Atiku said qualifying Nigerian refineries
would receive crude at a discounted price, with the intervention capped,
budgeted and audited.
He also said the government would not force private
refineries to sell petrol below cost, arguing that the subsidy would reduce
their production costs and allow the benefit to reach consumers.
The APC-PCC, however, said Atiku should provide Nigerians
with a detailed policy document and an independent legal and fiscal analysis of
the proposal.
The council also challenged him to reconcile the proposal
with his earlier position on deregulation, saying he had previously supported
the removal of petrol subsidy.
It said any intervention in the downstream petroleum sector
must be lawful, transparent, properly costed and capable of delivering
measurable benefits to consumers.
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