Atiku’s Crude Subsidy Plan: Who Pays the Bill?

Amarachi Ihesiulo

August 27, 2026
3 min read
Alhaji Atiku Abubakar

Former Vice President Atiku Abubakar’s proposal to sell crude oil to local refineries at preferential prices has triggered a fresh debate over Nigeria’s petroleum policy, government revenue and the future of deregulation.

Presidential aide Sunday Dare criticised the proposal, warning that fixing a special crude price for domestic refiners could place additional pressure on government finances while creating distortions in the downstream petroleum market.

Dare argued that Nigeria could lose significant revenue if crude meant for the domestic market were sold below prevailing commercial prices. He also warned that the arrangement could encourage arbitrage, create opportunities for fuel smuggling and weaken the market-based reforms introduced under the Petroleum Industry Act.

The debate comes as Nigeria continues to adjust to the post-subsidy era, with policymakers seeking ways to make petroleum products more affordable without returning to a system in which government shoulders a large portion of the cost.

Supporters of Atiku’s proposal could argue that cheaper crude for domestic refineries would help reduce production costs and, ultimately, lower petrol prices for consumers. With Nigeria now capable of refining more crude locally, preferential feedstock pricing could also strengthen domestic refining and reduce dependence on imported petroleum products.

However, opponents say such an arrangement could create an uneven playing field among refiners. Smaller and privately owned refineries may struggle if the government grants preferential access or pricing to selected operators.

The concern is particularly significant because the government has spent years attempting to move the petroleum sector toward deregulation and competition. A special crude-pricing arrangement could therefore raise questions about whether Nigeria is moving back toward government intervention in the industry.

Another issue is who ultimately bears the cost. If crude is sold to refiners below its market value, the difference could effectively represent a subsidy, even if it is not presented as one. The financial burden could fall on government through reduced revenue rather than appearing directly as a budgetary fuel subsidy.

Nigeria’s experience with fuel subsidies has shown how difficult it can be to maintain such interventions without creating major fiscal pressures. The government’s challenge is therefore to balance affordable energy, refinery viability, consumer protection and public revenue.

Atiku’s proposal has consequently opened a broader question: whether cheaper domestic crude should be prioritised as an industrial policy tool, or whether refiners should compete under market-based conditions.

For Nigerians, the central issue remains whether any new crude-pricing policy would translate into genuinely cheaper petrol—or simply move the cost from motorists to government revenues and taxpayers.