Tinubu, Atiku Differ Over Dangote Refinery’s Caution On Fuel Subsidy Return

The heated debate over the fuel subsidy return proposal continued yesterday as President Bola Tinubu and former vice president, Atiku Abubakar, disagreed over the position of Dangote Refinery on the reintroduction of fuel subsidy.

Dangote refinery on Thursday warned that changes in government policies on fuel pricing controls and the reintroduction of subsidies could hurt its refining margins and make financial forecasting more difficult.

The warning, contained in the company’s prospectus for its proposed initial public offering (IPO) read “Any reintroduction of fuel subsidies, price controls or other forms of intervention in the downstream petroleum sector could affect domestic pricing dynamics and the relationship between international crude oil prices and domestic refined product prices, which may, in turn, affect refining margins on products sold within Nigeria,” the company said.

Reacting, however, President Tinubu’s spokesman, Bayo Onanuga, on his X handle on Friday posted thus: “Dangote refinery warned that changes to government fuel price controls and subsidy reintroduction could hurt its refining margins and make financial forecasting harder.

“Not only will Dangote Refinery be imperilled, but the entire economy will also go into ruin. Let Atiku Abubakar, the political chameleon, know this.”

In a reaction, Atiku accused the Tinubu Presidency of deliberately distorting concerns raised by Dangote Refinery in a desperate attempt to discredit his production subsidy proposal, saying the refinery’s warning against arbitrary pump-price controls actually exposes the dishonesty of the government’s argument.

Atiku, in a statement by his Senior Special Assistant on Public Communication, Phrank Shaibu, said the Dangote Refinery was right to insist that a private refinery cannot be forced to bear losses caused by government-imposed prices, but added that the Presidency was being deliberately dishonest by pretending that this was what his plan proposed.

“Dangote raised a legitimate business concern. The Presidency turned it into a campaign of fear.

“A refinery that has invested billions of dollars cannot be commanded to sell indefinitely below cost and absorb the losses. That would be reckless, economically destructive and unfair to any private investor.

“But that is precisely why our proposal is different. We are restoring subsidies through a production subsidy model, not an import subsidy model.

“The difference is simple enough for every Nigerian to understand. Import subsidy spending public money to support petrol refined abroad and brought into Nigeria. A production subsidy supports crude oil refining here in Nigeria, enabling Nigerian refineries to produce fuel more cheaply and Nigerians to pay less.

“Think of it like rice. If the government wants rice to become cheaper, it has two choices: spend money making imported rice cheaper, or help Nigerian farmers reduce the cost of producing rice at home. The second option lowers prices while also creating jobs, strengthening local businesses and keeping economic activity in Nigeria.

“That is exactly what we are proposing for fuel. We are restoring the subsidy, but moving it from importation to production. The subsidy follows the barrel refined in Nigeria.”

Atiku said his proposal would reduce the cost of crude feedstock supplied to qualifying domestic refineries through a transparent, capped and independently verified mechanism.

“If the crude entering a refinery becomes cheaper, the cost of producing petrol should also come down. That reduction should then reach the average Nigerian while preserving legitimate refining costs and a reasonable commercial margin.

“There is a clear difference between helping a producer reduce costs and forcing that producer to sell at a loss.

“The Tinubu Presidency knows this. If it pretends otherwise, then it is not confused. It is deliberately misleading Nigerians.”

Atiku said the government’s attempt to equate every subsidy with import dependence was a brazen, dishonest and crude distortion designed to mislead Nigerians in the policy debate.

“Under our plan, support will be tied strictly to crude refined in Nigeria. Nigerian refineries will benefit. Nigerian workers will benefit. Nigerian businesses will benefit. Nigerian consumers will benefit.

“If you do not refine in Nigeria, you do not qualify. This is not a subsidy for foreign refineries. It is not a subsidy for importers. It is not a subsidy for middlemen. It is a subsidy for Nigerian production.”

The former vice president said the presidency’s reaction to Dangote’s disclosure showed how desperate the government had become to defend an economic model that had made everyday life painfully expensive for millions of Nigerians.

“Dangote raised concerns about margins, price controls and policy uncertainty. The Presidency somehow converted that into a prophecy that the economy would collapse.

“That is not economics. It is melodrama from the Villa. A refinery warning that it should not be forced to sell at a loss is not the same as saying that the government must never support domestic production.

“In fact, the warning proves why the intervention must be intelligently structured. Our policy does exactly that.”

Atiku said his administration would not fix an arbitrary pump price and compel domestic refineries to carry the financial burden.

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

“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.

“You cannot announce a politically convenient petrol price and quietly dump the cost on the refinery. That is not policy. That is confiscation by another name.”

Atiku said the production subsidy would therefore operate with strict safeguards, including a hard fiscal ceiling, a maximum support level per barrel, independent verification of supported crude, electronic tracking of crude intake and refined output, domestic supply obligations, transparent pricing, independent audits, and severe penalties for diversion or fraud.

“We will know how many barrels receive support, which refinery receives them, what is produced, what it costs the taxpayer and what benefit Nigerians receive. No mystery barrels. No endless claims. No blank cheques.”

Atiku said Nigeria’s refining future would depend heavily on private capital and that the commercial viability of domestic refineries must therefore be protected.

“Dangote Refinery, modular refineries and other Nigerian investments must remain viable. We want more refineries, more investment, more competition and more refining capacity.

“But the Nigerian consumer must also benefit from the fact that this country produces crude oil.

“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.”

Atiku accused the Tinubu administration of turning hardship into an ideology and calling it reform.

“For three years, Nigerians have been told to endure. Fuel rises, they say, endure. Transport rises, endure. Food rises, endures. Businesses are crushed by energy costs, enduring. Household incomes collapse, endure.

“Every new hardship is presented as proof that reform is working. Then we propose a production subsidy to reduce the underlying cost of producing petrol in Nigeria, and suddenly the Presidency predicts catastrophe.

“What kind of government is terrified by a policy designed to make production cheaper and life more affordable?”

Atiku said the hypocrisy was even more glaring because the Tinubu administration itself routinely grants waivers, tax credits, incentives and concessions to businesses.

“So intervention is acceptable when the government gives waivers and concessions to powerful interests, but it suddenly becomes dangerous when the objective is to reduce the cost of fuel, transport and food for ordinary Nigerians?

“That is not an economic principle. That is selective compassion. Our proposal is clear: support domestic production, reduce the cost of crude going into Nigerian refineries, protect legitimate refinery margins and ensure that lower production costs translate into lower costs for Nigerians.”