Special Adviser to President Bola Tinubu on Media and Public Communication, Sunday Dare, has criticized the proposal by the presidential candidate of the African Democratic Congress, Atiku Abubakar, to subsidize crude oil supplied to local refineries.

Dare said the proposal would create fiscal and market distortions.

He argued that selling federation crude to local refineries at preferential prices would reduce government revenue.

He said the proposal, which would involve selling crude to local refiners at discounted prices, would create an “immediate fiscal hole” in the Federation Account.

Atiku  said his position on subsidy had not changed, while disowning comments by one of his media aides, Paul Ibe, who had suggested that the intervention would be gradually phased out as the economy recovered.

Ibe had earlier explained that Atiku’s proposed subsidy would be tied to crude oil production and domestic refining, with crude supplied to local refiners at a discounted price.

He said the arrangement would provide temporary relief, stimulate economic activity and reduce the cost of fuel.

The crude oil will be sold at a discounted price, subsidized to refiners, and that will enable refiners to be able to produce fuel and diesel at a cheap cost. And when they produce cheaply, they will sell at the real pump price the.

Dare, however, argued that preferential crude allocations could distort the domestic market and create artificial monopolies while undermining smaller indigenous modular refineries.

He also said the arrangement could create a price gap between Nigeria and neighboring West African countries, potentially encouraging cross-border fuel smuggling.

Atiku’s position has revived debate over the removal of petrol subsidy, which Tinubu announced at his inauguration on May 29, 2023.