State House Tackles Atiku’s Call for Petrol Subsidy Restoration
Says proposal is retrogressive, fiscally unsustainable and disconnected from Nigeria’s current petroleum realities
ABUJA, August 20, 2026 — The Presidency has rejected former Vice President Atiku Abubakar’s proposal to restore petrol subsidy, describing the position as a reversal of his earlier stance and a policy that could return Nigeria to a financially unsustainable petroleum regime.
In a statement issued by the Special Adviser to the President on Information and Strategy, Bayo Onanuga, the Presidency said Atiku was entitled to propose alternative economic policies but maintained that Nigerians deserved clear answers on how a renewed subsidy regime would be funded and implemented.
The Presidency recalled that the Petroleum Industry Act (PIA) had provided for the removal of petrol subsidy by the end of June 2023, adding that President Bola Tinubu merely accelerated the process by a few weeks upon assuming office.
According to the statement, the former subsidy regime placed a heavy burden on public finances by requiring government to absorb the difference between the regulated pump price of petrol and the actual cost of supplying the product.
It argued that restoring the policy would therefore require more than a political announcement, as government would have to establish a fresh legal, fiscal and administrative framework for financing and administering the subsidy.
The Presidency also challenged claims that the removal of subsidy had created a huge pool of unused funds, saying there was no identifiable ₦30 trillion subsidy windfall sitting in government coffers.
It explained that the former arrangement involved under-recovery of costs by the national oil company, with government ultimately bearing the financial burden through public-sector financing and other arrangements.
Domestic Refining Capacity Changes the Equation
The Presidency further argued that Nigeria’s petroleum sector has undergone significant changes since the removal of subsidy, particularly with the emergence of increased domestic refining capacity.
It pointed to the Dangote Refinery and other local refineries as evidence that Nigeria is gradually moving away from its former dependence on imported refined petroleum products.
According to the Presidency, returning to a heavily subsidised market could undermine the growth of domestic refining and discourage investment in smaller local refineries.
It maintained that Nigeria’s emerging ability to refine petroleum products locally offers opportunities for improved energy security, foreign-exchange conservation, industrial development and job creation.
The statement contrasted the present situation with the period when Nigeria depended heavily on imported refined petroleum products, arguing that the country’s petroleum economy is now undergoing a structural transformation.
Who Will Pay for a Restored Subsidy?
The Presidency urged Nigerians to examine the financial implications of Atiku’s proposal, asking who would ultimately bear the cost of subsidising petrol if the policy were restored.
It questioned whether the government would sell petrol at a substantially reduced price while absorbing the difference between the pump price and the economic cost of the product.
The statement warned that such a policy could once again put pressure on government finances, reduce resources available to the federal, state and local governments, increase borrowing and constrain spending on infrastructure and social services.
It further argued that the subsidy regime had historically contributed to significant financial pressures on the government and the national oil company.
Government Says Relief Must Be Sustainable
The Presidency acknowledged the hardship caused by rising energy and transportation costs, stressing that the government was aware of the pressure higher petrol prices had placed on households and businesses.
However, it said sustainable relief should not come through the restoration of a system that had previously imposed significant and unpredictable costs on public finances.
The statement highlighted the government’s promotion of Compressed Natural Gas (CNG) as one alternative, noting that CNG can provide substantial savings compared with petrol for taxis, cars, buses and distribution vehicles.
It urged businesses and transport operators to ensure that the benefits of lower energy costs are reflected in the prices paid by consumers.
Atiku Asked to Provide Details
The Presidency challenged Atiku and other political actors advocating a return to petrol subsidy to provide Nigerians with specific details of their proposals.
It asked how much a restored subsidy would cost annually, the revenue sources that would finance it, whether government would borrow to fund the programme and what legislative changes would be required under the existing petroleum-sector framework.
The Presidency also asked how a new subsidy regime would prevent the abuses and leakages associated with the former system.
With Nigeria now producing more petrol domestically, it further questioned precisely what a proposed subsidy would cover — whether the cost of local production, transportation, distribution or another component of the petroleum value chain.
The statement said Nigeria could not afford to return to policies whose true costs were hidden from citizens and later manifested through rising debt, reduced public spending and pressure on the national currency.
It called for a robust national debate on the cost of living and the direction of economic policy but insisted that such discussions must be based on the realities of Nigeria’s present petroleum market rather than the conditions of the past.
The Presidency concluded by urging all political actors, including Atiku Abubakar, to present Nigerians with the full fiscal, legal and economic implications of any proposal to restore petrol subsidy.
Bayo Onanuga
Special Adviser to the President
(Information and Strategy)
August 20, 2026