IMPI Defends FG’s 30-Day Petrol Rebate, Faults Atiku’s Subsidy Restoration Plan
Oru Leonard
The Independent Media and Policy Initiative (IMPI) has defended the Federal Government’s 30-day petrol retail rebate and forward crude-sale arrangement, describing them as measures designed to cushion consumers against global oil price volatility without reintroducing fuel subsidies.
The policy think-tank also criticised the proposal by former Vice President and African Democratic Congress (ADC) presidential candidate, Alhaji Atiku Abubakar, to restore fuel subsidies, warning that such a move could undermine Nigeria’s economic progress.
In a policy statement signed by its Chairman, Dr Omoniyi Akinsiju, IMPI described the government’s intervention as a time-bound stabilisation mechanism comparable to Germany’s 90-day fuel discount model, which it said Atiku had previously commended.
According to the organisation, the 30-day period represents a controlled trial rather than an expiration date, providing a temporary buffer while longer-term measures to stabilise fuel prices are developed.
IMPI argued that the arrangement avoids the creation of new public debt and protects government revenue from the substantial fiscal burden associated with a conventional fuel subsidy regime.
Comparing the Federal Government’s approach with Atiku’s proposal, Akinsiju said the two policies differ fundamentally in their financing mechanisms and implications for the petroleum sector.
He explained that the government’s approach relies on market-linked forward pricing, while Atiku’s proposal involves a production subsidy funded through public appropriations, with payments to refinery owners capped and audited within the national budget.
The IMPI chairman warned that compelling international oil companies and private joint-venture partners to surrender equity crude at government-mandated discounts could lead to contractual disputes, investor flight and costly international arbitration.
He also maintained that the previous subsidy regime contributed to the challenges facing Nigeria’s oil and gas investment climate, arguing that the country struggled to attract final investment decisions for new projects before the administration of President Bola Tinubu.
IMPI further explained that the 30-day petrol rebate is complemented by a forward crude-sale arrangement intended to provide greater stability in the domestic petroleum market.
Under the framework as described by the organisation, crude sales to local refiners would be based on predetermined pricing arrangements, alongside a negotiated petrol landing cost or ex-gantry ceiling of ₦1,350 per litre.
Akinsiju said the 30-day intervention should be understood as an immediate fiscal bridge while medium-term structural measures mature.
He explained that the ₦1,350 benchmark is not intended as a permanent price control but as a mechanism for smoothing price fluctuations, with the baseline reviewed every 30 days.
According to him, the pricing formula incorporates Platts, a global petroleum pricing benchmark, the naira exchange rate, local logistics and port charges.
Providing an illustration of the proposed framework, Akinsiju said a geopolitical crisis, such as a conflict affecting shipping through the Strait of Hormuz, could push the calculated landing cost of petrol to ₦1,450 per litre.
Under such circumstances, the ₦100 difference would temporarily be absorbed by refiners, according to his explanation.
Conversely, if the actual landing cost subsequently fell to ₦1,250 per litre, the retail price would remain at the ₦1,350 ceiling, allowing the ₦100 difference to offset the previously deferred deficit.
He said the arrangement was designed to balance temporary increases and decreases in landing costs rather than require the government to fund a conventional subsidy.
Akinsiju added that if international crude prices or the exchange rate settled into a new price range, the relevant steering committee would review and adjust the following month’s benchmark.
For instance, he said the ceiling could be revised to ₦1,380 or ₦1,300 per litre, depending on prevailing market conditions, to ensure the mechanism remained financially sustainable.
IMPI Warns Against Return to Fuel Subsidies
The policy group maintained that the government’s arrangement should not be equated with the former fuel subsidy system, arguing that its objective is to manage short-term market shocks without committing public funds to an open-ended price-support programme.
It also cautioned against policies that could expose the country to renewed fiscal pressure or undermine investor confidence in the petroleum industry.
IMPI’s position is that the 30-day rebate and forward crude-sale arrangement offer a market-oriented alternative to a return to government-funded fuel subsidies.
However, the effectiveness of the framework will depend on its implementation, the transparency of its pricing formula, the treatment of deferred costs and the ability of participating refiners to sustain the arrangement without creating additional financial pressures.
