Atiku Abubakar's Production-Based Crude Oil Subsidy Plan Sparks Debate

Nigeria's former Vice President Atiku Abubakar has proposed an alternative to the country's fuel subsidy removal, which he believes will alleviate the suffering of Nigerian households and businesses. The proposal involves a production-based crude oil subsidy that targets public and private refineries in Nigeria.

Atiku's plan differs from the previous regime's corrupt importation-based subsidy, which depleted foreign exchange reserves and put pressure on the dollar to naira value. However, critics argue that corruption could set in and political patronage may creep in, making the proposal unsustainable in the long run.

The removal of fuel subsidy by President Tinubu's administration has led to a significant increase in the cost of living, with many small and medium-sized businesses shutting down due to high energy costs. Atiku is trying to capitalize on public anger over this issue and devise a targeted, gradual phasing out of crude oil subsidy.

However, experts argue that this proposal may not be feasible or sustainable, particularly given the passage and implementation of the Petroleum Industry Act (PIA) in June 2023, which makes any form of subsidy illegal. This would mean that Atiku's plan would face significant legal hurdles even if implemented.