Former Vice President Atiku Abubakar has outlined a proposed framework for subsidising domestically refined petrol, arguing that government intervention should reduce production costs for Nigerian refineries rather than compel private producers to sell fuel below cost.

Atiku said concerns raised by the Dangote Refinery over government imposed petrol prices supported his proposed production subsidy model rather than undermined it.

In a statement issued on Friday by his Senior Special Assistant on Public Communication, Phrank Shaibu, Atiku accused the Federal Government of misrepresenting his proposal and maintained that his plan was fundamentally different from Nigeria's previous petrol subsidy system.

Atiku, who was identified in the statement as the presidential candidate of the African Democratic Congress, said private refiners should be allowed to recover legitimate production costs and earn reasonable commercial returns.

"Dangote raised a legitimate business concern. The presidency turned it into a campaign of fear," the statement said.

He argued that a refinery that had invested billions of dollars could not reasonably be expected to sell petrol indefinitely below its production cost and absorb the resulting losses.

SUBSIDY TARGETED AT DOMESTIC PRODUCTION

Atiku said the central difference between his proposal and Nigeria's previous subsidy regime was where government financial support would be directed.

Under his proposed production subsidy model, government assistance would be targeted at crude oil supplied to qualifying domestic refineries rather than subsidising imported petroleum products.

According to Atiku, reducing the cost of crude feedstock supplied to Nigerian refiners could lower their production costs, which should ultimately translate into cheaper petrol for consumers.

"If the crude entering a refinery becomes cheaper, the cost of producing petrol should also come down," he said.

Atiku stressed that the system would be structured to preserve legitimate refining costs and reasonable commercial margins, meaning participating refineries would not be required to sell their products at a loss.

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

ADDITIONAL CONSUMER SUPPORT MUST BE BUDGETED

The former Vice President said the government could provide additional relief to consumers if reductions in crude input costs were insufficient to achieve the desired pump price.

However, he argued that any additional intervention should be funded transparently through the federal budget rather than transferring the financial burden to private refiners.

According to Atiku, such expenditure should be clearly budgeted, capped and independently audited so Nigerians can determine how much public money is being spent and what benefits consumers receive in return.

"If government wants to provide additional relief beyond what lower crude input costs can sustainably deliver, then government must pay for that relief openly," he said.

"It must be budgeted. It must be capped. It must be audited. Nigerians must know exactly what is being spent and what they are receiving in return."

ATIKU PROPOSES CONTROLS TO PREVENT ABUSE

Atiku also outlined safeguards he said would prevent the production subsidy programme from developing the problems associated with previous fuel subsidy arrangements.

The proposed system would include a hard fiscal ceiling, a maximum government support level per barrel and independent verification of crude oil supplied to participating refineries.

It would also involve electronic tracking of crude intake and refined petroleum products, domestic supply obligations and independent audits.

"No mystery barrels. No endless claims. No blank cheques," Atiku said.

He maintained that only petroleum products refined domestically would qualify for support under the proposed programme.

"If you do not refine in Nigeria, you do not qualify," he said.

According to Atiku, the policy would therefore exclude foreign refineries, petroleum importers and other intermediaries from receiving the proposed production subsidy.

REFINERIES MUST REMAIN COMMERCIALLY VIABLE

Atiku said Nigeria needed a policy capable of simultaneously protecting domestic refining investments and reducing the financial pressure high petrol prices place on households and businesses.

He argued that the Dangote Refinery, modular refineries and other domestic refining investments must remain commercially viable if Nigeria hopes to attract additional investment and expand its refining capacity.

"We want more refineries, more investment, more competition and more refining capacity," he said.

At the same time, Atiku argued that Nigerians should receive tangible benefits from the country's position as a crude oil producer.

"We reject the false choice between a profitable refinery and an affordable pump price. A competent government should be able to protect both the producer and the consumer," he added.

ATIKU CRITICISES SUBSIDY REMOVAL

Atiku also criticised the Federal Government's handling of petrol subsidy removal, linking higher fuel prices to increases in transportation, food and business operating costs.

He argued that Nigerians had endured years of rising living costs and that reducing the underlying cost of domestically produced petrol could provide broader economic relief.

"For three years, Nigerians have been told to endure. Fuel rises, they say endure. Transport rises, endure. Food rises, endure. Businesses are crushed by energy costs, endure," he said.

Atiku maintained that his proposal should not be interpreted as a return to the previous import based subsidy system.

Instead, he described it as a mechanism intended to encourage domestic production, preserve the commercial viability of Nigerian refineries and potentially reduce petrol prices for consumers.

His comments come amid continuing debate over how Nigeria should balance market based petroleum pricing with the economic pressure high energy costs place on households and businesses.