APC challenges Atiku to clarify legal and fiscal basis of proposed petrol production subsidy

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.

The APC campaign council asked Atiku to disclose the proposed subsidy rate, annual spending ceiling, volume of crude oil or petrol to be covered, funding source, and safeguards against diversion, smuggling, and fraudulent claims. The post APC challenges Atiku to explain legal, fiscal basis of petrol subsidy proposal appeared first on Premium Times Nigeria.