Is Atiku Abubakar's Production-Based Targeted Crude Oil Subsidy Feasible, Sustainable?

Former Vice President Atiku Abubakar seemed very concerned about the pains and anguish average Nigerian households and businesses are going through because of "Fuel Subsidy" withdrawal by the Bola Tinubu administration, and appear to be genuinely looking for a creative and innovative alternative way of reducing this suffering by proposing a more beneficial "Production-based Crude Oil Subsidy" to Nigerian based Refineries.

I don't think at this stage of our economic development, bringing back "Fuel Subsidy" is going to be feasible! The horse is already bolted away from the stable, and there is no going back now!

Although Atiku's Subsidy, based on Production quota targeting for Public and Private Nigerian Refineries- not the previous regimes criminal, corrupt Importation-based subsidy that sapped local jobs and depleted our Foreign Exchange and put enormous pressure on Dollar to Naira value- I see some sense in the former Vice President's model of "Production based subsidy," even though Corruption could set in and political patronage starts creeping in and we are back to square one, and same debate crops up again as to whether to remove the Subsidy, and when is the appropriate time to do so.

No doubt, the subsidy removal has caused enormous pains on Nigerians since that fateful day (29th May, 2023) when "Subsidy is gone" inaugural speech was pronounced by President Tinubu- immediately causing unbearable hike in cost of living, and even closure of many SMEs due to high energy and transportation cost, excecerbated over time by the rapid devaluation of the Naira occasioned by the Exchange rate unification reform by same president Tinubu's administration, almost simultaneously.

I think Atiku is latching on to public anger on the suffering of Nigerians, in high cost of living and shutting down of many busineses due to unbearable hike in Energy costs- in devising this targeted, gradual, phasing out of Crude Oil Subsidy, not fuel import Subsidy that benefited foreign exporters of refined petroleum, as well as criminal Nigerian importers dangerous corrupt practices, from Invoice padding/over invoicing etc.

Atiku's method may offer some short temporary relief in the pains Nigerians are currently going through currently. However it may not be feasible, practicable at this moment nor is it sustainable in the long run. How would Atiku pay the N70,000 minimum wage, when about 27 states of the federation were unable to pay N30,000 minimum wage before the "subsidy removal" by the Tinubu government?

Besides with the passage and implementation of the "Petroleum Industry Act" (PIA) since June, 2023, making Subsidy of any kind illegal, Atiku or anyone silly enough to go back to any Petroleum subsidy regime would have an insurmountable Legal mountain to climb, and even if successful could endanger investments and productivity in the Petroleum Industry that has gathered pace in the past three years or thereabout.

Chief Tony Onyema Ishiekwene
ACMA; CGMA