Federal Govt’s Fuel Price Plan Not Return To Subsidy, Group Tells Atiku

The Independent Media and Policy Initiative (IMPI) has said that there is no similarity between key measures introduced by the federal government to mitigate the effects of the Middle East conflict on fuel prices and the subsidy restoration proposal muted by former Vice President and Presidential candidate of the African Democratic Congress (ADC) Atiku Abubakar.

Its chairman, Dr Omoniyi Akinsiju, the think tank argued that neither the 30-day fuel discount at Nigerian National Petroleum Company Limited, NNPCL’s retail stations nor the price modulation plan amount to a return to the costly fuel subsidy regime.

The policy group added that there was no basis for the former Vice President to claim that the policy thrust was a ‘watered down version of his campaign promise of a budgeted production subsidy to local refineries.

It said: Former Vice President Atiku, in his attack on the 30-day fuel price rebate policy, labelled it ‘a panic-driven stunt’ timed around political cycles. He argues that a 30-day window fails to fix structural inflation and clarify how motorists buying outside NNPCL stations will find relief.

“We believe this Atiku outlook is parochial and lacks a clear understanding of the policy as enunciated, even after he had earlier commended Germany’s 90-day, 17 cent fuel discount model.

‎”Our position is that the policy is an agile, data-driven intervention designed to act as a shock absorber against a severe global price spike, rather than a return to a broken subsidy system.

‎”The policy thrust is clear enough; it is not a 30-day “expiration date” but, rather, a controlled trial period. Modern macroeconomic management requires short-term, iterative policy windows to monitor market impacts on inflation, prevent immediate household panic, and track supply-chain leakages before extending or adjusting parameters. It allows the government to review maximum gantry prices dynamically.”

‎He said a traditional subsidy involves the government cutting direct checks to marketers using public funds it does not have.

“This discount is structurally different as it is the NNPCL simply forgoing its commercial retail profit margins to sell petrol at landing cost. No new debt is created, and the national treasury remains insulated from a multi-trillion haemorrhage that would have been incurred under the Atiku crude oil discounted model.

‎”The N1,350 per litre ceiling on the ex-gantry or landing cost of petrol is not a frozen price control. Instead, it functions as a dynamic month-smoothing mechanism calculated through a strict economic formula, which will be reviewed at the end of every 30 days,” he added.