All Progressives Congress Presidential Campaign Council (APC-PCC) has faulted the proposal by the presidential candidate of the African Democratic Congress (ADC), Atiku Abubakar, for the Federal Government to intervene in petrol and diesel prices and provide cheaper crude oil to local refineries.
The APC-PCC challenged Atiku to explain the legal, fiscal and practical basis of the proposal, arguing that it must operate within the provisions of the Petroleum Industry Act (PIA) 2021.
The council’s position was contained in a statement issued on Sunday by its spokesperson, Dele Alake, following Atiku’s call at a media briefing in Abuja for measures to reduce the cost of petroleum products and support domestic refining.
Alake said Atiku’s proposal raised questions about the legal framework for government intervention in the downstream petroleum sector, noting that Section 205(1) of the PIA provides for wholesale and retail prices of petroleum products to be determined under unrestricted free-market conditions.
He also cited the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), which recently said it does not fix pump prices or issue administrative price templates except where statutory conditions for intervention are met. The regulator said no such market failure had been declared.
According to Alake, a direct pronouncement by President Bola Tinubu on pump prices would also raise questions about the statutory responsibilities of the NMDPRA, which regulates the midstream and downstream petroleum sectors.
‘That proposal raises important legal, fiscal and practical questions that he must answer.
‘Section 205(1) of the Petroleum Industry Act 2021 provides that unrestricted free-market conditions shall determine wholesale and retail prices of petroleum products,’ he said.
Alake challenged Atiku to explain whether refineries receiving the proposed support would be required to sell petrol at a government-prescribed price.
‘If the answer is yes, he should identify the legal framework under which the government would impose that price condition and explain how it would operate consistently with the Petroleum Industry Act.
‘If the answer is no, he should explain how public support to refiners would guarantee lower prices at filling stations. Without an enforceable mechanism, refiners could receive the benefit while consumers continued to pay market prices,’ he said.
The APC-PCC spokesperson also demanded details of the cost and funding mechanism for Atiku’s proposal.
He expressed reservations about the proposed preferential pricing of crude for domestic refineries, arguing that such a measure could reduce the value of crude accruing to the Federation and consequently affect revenues available to the federal, state and local governments.
‘Any discount on crude would reduce the value accruing to the Federation and, consequently, the revenue available to the federal, state and local governments,’ Alake said.
He further claimed that the cost of the proposed intervention could run into several trillions of naira annually, depending on the size of the discount, the volume of crude covered and whether the support applied to the entire barrel or only petrol sold domestically.
The APC-PCC said the government was instead pursuing alternative measures to reduce transportation costs through compressed natural gas (CNG) and electric mass transit, adding that CNG and electric buses were already operating on some routes.
The council acknowledged the pressure caused by rising petrol prices but maintained that the Tinubu administration would continue implementing measures aimed at cushioning the impact on Nigerians.
It noted that petrol had sold for about ?830 per litre before the Middle East crisis pushed crude oil prices above $100 per barrel, adding that any de-escalation of the crisis could ease global crude prices and, consequently, petrol and diesel prices.
The NMDPRA, according to the APC-PCC, is also working with the Federal Competition and Consumer Protection Commission (FCCPC) on alleged price-gouging and with the Nigeria Customs Service to tackle the diversion of petroleum products across Nigeria’s borders.