2027: Atiku’s plan to reintroduce subsidy not practicable — Gov Sule

Nasarawa State Governor, Abdullahi Sule, has said the proposal by the African Democratic Congress presidential candidate, Atiku Abubakar, to reintroduce fuel subsidy if elected in 2027 is not practicable.

Sule, who spoke on MIC ON Podcast, said his position was informed by his experience in the oil and gas industry, where he worked as an engineer before becoming governor.

The governor said the complexities surrounding the importation and distribution of Premium Motor Spirit, commonly known as petrol, made a return to subsidy difficult to implement effectively.

“I come from that industry. I know the challenges of subsidy. It is not practicable to say you are going to reintroduce subsidy,” Sule said.

He cited the logistics involved in importing petrol, explaining that a typical vessel carrying about 30,000 metric tonnes of the product could face delays at the port because of draft limitations.

According to him, such vessels may have to discharge their cargo through lightering, resulting in additional time and demurrage costs.

Sule also alleged that the subsidy regime created opportunities for corruption, with some individuals benefiting from prolonged delays in the discharge of imported petroleum products.

“Sometimes, because of the corruption with subsidy, they allow it actually to stay longer than necessary because some people make money out of that. So, the more the demurrage, the more corruption, the more some individuals have more money in their pockets,” he said.

The governor further questioned aspects of the former system under which the Nigerian National Petroleum Corporation, NNPC, imported petroleum products and sold them to marketers at subsidised prices.

He alleged that some marketers who bought products from the NNPC were also involved in importing petroleum products, creating opportunities for them to profit from the price difference.

Sule said the same challenges extended beyond refined petroleum products to crude oil supply.

He argued that Nigeria’s crude production was not necessarily available for immediate domestic use because portions of the country’s future production had already been committed through forward sales.

“Is Dangote not importing crude oil? Do you think Nigeria has enough crude oil to give Dangote after the forward sales of oil?” he asked.

Sule said the reality of crude supply and forward contracts could only become clearer to policymakers when they assumed office and had access to the details of the industry.

“Sometimes when you’re outside the cycle, you think the cycle is empty until you get in. Part of the production of Nigeria has been sold, forward sales long time ago. It’s when you come to office you’ll realise you don’t have the oil,” he said.

Atiku has said his approach to petrol subsidy would be based on increasing domestic production rather than subsidising consumption. Sule, however, maintained that a return to the subsidy regime would not be practicable given the structural challenges he outlined.

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