By Gabriel Ameh
The Independent Media and Policy Initiative (IMPI) has rejected claims that the Federal Government’s latest measures to cushion the impact of rising fuel prices amount to a return to petrol subsidies, insisting that the policy differs significantly from former Vice President Atiku Abubakar’s proposal.
The policy think tank said the government’s 30-day petrol discount at Nigerian National Petroleum Company Limited (NNPCL) retail outlets and its price modulation plan should not be confused with the fuel subsidy regime abolished in 2023.
In a policy statement signed by its chairman, Dr Omoniyi Akinsiju, IMPI argued that the measures were designed to provide temporary relief from global oil price shocks without imposing the same direct financial burden on public finances associated with conventional fuel subsidies.
The group also disputed Atiku’s description of the policy as a watered-down version of his proposal to introduce a budgeted production subsidy for local refineries.
Atiku, a presidential candidate of the African Democratic Congress (ADC), had criticised the government’s 30-day fuel price rebate, describing it as a panic-driven measure that does little to address structural inflation or provide relief to motorists who purchase petrol outside NNPCL stations.
However, IMPI maintained that the intervention should be understood as a temporary mechanism for cushioning the effects of international fuel price increases rather than an attempt to revive the discontinued subsidy system.
Why IMPI Says FG’s Plan Is Different
According to the policy group, the Federal Government’s approach relies on market-linked pricing arrangements and adjustments to NNPCL’s retail profit margins rather than direct payments from the national treasury to fuel marketers.
IMPI explained that under the arrangement, NNPCL would forgo its commercial retail margins to sell petrol at a price linked to its landing cost.
The group argued that this approach differs from a conventional subsidy, under which the government covers the gap between the regulated selling price and the actual cost of supplying a product.
It said the distinction was important because direct subsidy payments could create substantial fiscal obligations for the government.
IMPI also described the 30-day period as a trial window for monitoring market conditions, inflationary pressures and possible supply-chain leakages before deciding whether to adjust or extend the intervention.
According to the group, the government would use the period to assess the policy’s impact and review the parameters governing petrol prices.
The think tank further stated that the proposed ₦1,350-per-litre ceiling on petrol’s ex-gantry or landing cost should be understood as part of a price-smoothing mechanism rather than a permanent price freeze.
IMPI Contrasts FG’s Approach with Atiku’s Proposal
The policy group said the fundamental difference between the two approaches lies in how the cost of providing relief to consumers would be managed.
According to IMPI, the Federal Government’s approach relies on market-linked forward pricing, local-currency arrangements and adjustments to commercial margins.
It argued that these measures are intended to manage price fluctuations without creating a direct budgetary obligation equivalent to a traditional fuel subsidy.
By contrast, IMPI said Atiku’s proposed production subsidy would require the government to make budgeted payments to refinery owners to cover the difference between specified production costs and selling prices.
The group maintained that such an arrangement could place additional pressure on public finances if not carefully designed and managed.
It also questioned the feasibility of requiring international oil companies and their joint-venture partners to supply crude oil at government-mandated discounts.
According to IMPI, such a policy could raise contractual and investment concerns, particularly if companies believed the arrangements undermined the commercial terms governing their operations.
The group warned that disputes over crude oil pricing could weaken investor confidence, potentially affecting investment decisions in Nigeria’s oil and gas industry.
IMPI Raises Concerns Over Investment in Oil and Gas
IMPI further argued that forcing oil producers to sell crude below its market value could discourage investment in exploration and production.
It said investors might redirect capital towards countries offering more predictable commercial arrangements if they considered Nigeria’s pricing policies unfavourable.
The think tank maintained that attracting investment into the petroleum sector would require policies that balance domestic economic priorities with the commercial interests of producers and investors.
It also linked investor confidence to the development of new oil and gas projects, arguing that policy uncertainty could affect long-term production and sector growth.
However, the concerns raised by IMPI reflect the organisation’s assessment of Atiku’s proposal; the actual economic impact would depend on the final policy design, funding arrangements and implementation.
Debate Over Fuel Prices and Consumer Relief Continues
The disagreement highlights the competing policy options being discussed as Nigeria responds to changes in global oil prices and their effects on domestic fuel costs.
While the government’s intervention, as described by IMPI, seeks to provide temporary relief through pricing arrangements and margin adjustments, Atiku has argued that the measure does not adequately address the wider economic pressures facing consumers.
The central question is whether a temporary pricing intervention can provide meaningful relief to motorists and households without creating new financial or market distortions.
For millions of Nigerians affected by high transport and living costs, the impact of the policy will ultimately depend on how much it reduces the price consumers pay for petrol, how widely the relief is available and whether it can be sustained.
Source: Independent Media and Policy Initiative (IMPI), as reported by Times Reporters.
