The Presidency has criticised former Vice President Atiku Abubakar’s proposal to restore petrol subsidy if elected president in 2027, describing the policy as fiscally unsustainable and a reversal of Nigeria’s petroleum-sector reforms.

The Special Adviser to the President on Information and Strategy, Bayo Onanuga, in a statement on Thursday, accused Atiku of making a “volte-face” on a major plank of his economic position ahead of the 2023 presidential election.

Onanuga said Atiku, who had previously advocated the removal of petrol subsidy, was now proposing its restoration because of his alleged desperation to regain power.

He, however, acknowledged Atiku’s constitutional right to propose alternative policies, but challenged him to explain how the proposed subsidy would be funded and implemented under the country’s current petroleum-sector framework.

According to the presidential aide, the subsidy was not simply money sitting in government coffers for distribution to consumers, but represented the difference between the cost of supplying petrol and the regulated pump price.

He said the previous arrangement imposed a huge burden on public finances, adding that claims of a N30 trillion subsidy windfall or savings were unfounded.

Onanuga said the Petroleum Industry Act had provided for the removal of petrol subsidy by the end of June 2023, with President Bola Tinubu only accelerating the process by a few weeks after assuming office.

He argued that restoring the old system would therefore require a fresh legal, fiscal and administrative framework, including identifying the source of funding and determining how subsidy payments would operate within the current petroleum market.

The Presidency also highlighted changes in Nigeria’s downstream petroleum sector since 2023, particularly the expansion of domestic refining capacity.

Onanuga said the emergence of the Dangote Refinery and other local refineries had changed the dynamics of petrol supply, allowing Nigeria to increasingly rely on domestic refining rather than imported refined products.

He argued that restoring the former subsidy regime could undermine investments in local refining and put smaller domestic refineries under financial pressure.

According to him, Nigeria is gradually moving from a system where scarce foreign exchange was used to import refined petroleum products to one where crude oil can be processed domestically for the Nigerian market.

He said the transition offered opportunities for greater energy security, foreign-exchange conservation, industrial development and job creation.

The presidential aide also claimed that funds previously used to support petrol price discounts had become available to the three tiers of government following the subsidy removal.

He cited the approximately N3 trillion shared by the federal, state and local governments from the Federation Account in July as evidence of increased government revenue.

Onanuga said the former subsidy system had at various times been financed through borrowing and other public-sector arrangements, warning that a return to the policy could once again increase government debt and reduce funds available for infrastructure and social services.

He challenged Atiku to state the proposed petrol price under his subsidy plan and explain who would bear the difference between the pump price and the economic cost of petrol.

“If petrol is sold below its economic cost, someone must absorb the difference,” he said, adding that the burden would ultimately fall on public finances through reduced government spending, lower allocations to states and local governments, increased borrowing or higher public debt.

The Presidency acknowledged the hardship caused by rising petrol, transportation and energy costs, but said sustainable solutions should focus on reducing energy costs rather than recreating the old subsidy system.

Onanuga cited the Federal Government’s promotion of compressed natural gas as one alternative, saying CNG could be about 70 per cent cheaper than petrol for taxis, cars and distribution trucks.

He urged commercial transport operators to pass the benefits of lower energy costs on to Nigerians.

The presidential aide also called on Atiku and other political actors to provide detailed fiscal and legal explanations for any proposal to restore subsidy.

He asked how much the proposed programme would cost annually, what revenue source would finance it, whether government would borrow to fund it, and whether the National Assembly would need to amend existing provisions of the Petroleum Industry Act.

He further questioned how subsidy payments would be verified and protected from the abuses associated with the former regime.

Onanuga said the debate over petrol prices and the cost of living was legitimate, but insisted that political promises must be backed by clear fiscal calculations.

He urged Nigerians to assess proposals based on the realities of the country’s current petroleum market rather than the conditions that existed before the sector’s reforms.

“Political promises must be backed by fiscal arithmetic,” Onanuga said, urging Atiku to present Nigerians with the full fiscal and legal implications of his proposal.