₦airaland Forum

MEMORANDUM TO THE PRESIDENCY:
RE: URGENT APPEAL FOR STRATEGIC FUEL SUBSIDY INTERVENTION.

Your Excellency,
I write to respectfully appeal for immediate executive action to implement a time-bound, fiscally-responsible fuel subsidy program to cushion Nigerians against the current petroleum price shock and stabilize our economic trajectory.

THE CASE FOR INTERVENTION

1. The Windfall Revenue Opportunity
Current global oil prices ($80-85/barrel) present a rare fiscal window. Against our budget benchmark of $60/barrel, Nigeria captures approximately $1.1-1.4 billion monthly in excess crude premiums. This windfall, combined with Executive Order 9 inflows, creates sustainable fiscal space for targeted intervention without jeopardizing FAAC distributions or state solvency.

2. The Dangote Refinery Structural Advantage
Unlike previous subsidy eras plagued by import fraud and dollar drain, the Dangote Refinery offers a domestic production cost base of approximately ₦386/litre. By negotiating direct offtake agreements at production cost plus modest margin, the true subsidy burden reduces significantly compared to import-parity pricing. This eliminates: - Round-tripping and phantom import claims - CBN dollar pressure - The “subsidy fraud” that plagued previous administrations

3. The Economic Stabilization Imperative
Unmitigated fuel price increases trigger cascading effects...

PROPOSED FRAMEWORK: THE “PETROLEUM PRICE STABILIZATION PROGRAM”

* Duration: 12-18 months with quarterly review triggers
* Funding Mechanism: - Ring-fence 60% of excess crude account inflows - Dangote direct offtake at production cost (₦386-400/litre range) - Targeted pump price: ₦600-650/litre (vs. ₦850+ market rate)

Safeguards Against Past Failures:
1. No import-based subsidy — strictly domestic refining
2. Transparent quarterly audits published by NEITI
3. Automatic adjustment triggers: Program phases down if oil prices fall below $70/barrel for 60 consecutive days
4. Parallel social investment: Simultaneous rollout of CNG conversion incentives and mass transit subsidies

Exit Strategy: - Tied to Dangote refinery reaching 100% capacity (650,000 bpd) - Linked to establishment of 2-3 additional functional refineries - Conditional on inflation falling below 15% for two consecutive quarters

THE ALTERNATIVE IS COSTLIER

The fiscal cost of subsidy (estimated ₦25-28bn daily under this framework) must be weighed against:
- Lost GDP growth from demand collapse
- Increased security spending from social unrest
- Revenue shortfalls from business closures and tax base erosion
- - Human capital flight as skilled workers exit economic hardship
A temporary stabilization investment now prevents a larger economic rescue later.

APPEAL TO EXECUTIVE ACTION
I respectfully urge Your Excellency to:
Direct immediate negotiations with Dangote Refinery for government offtake at production pricing
Issue executive guidance to the NNPC/Finance Ministry to operationalize the Petroleum Price Stabilization Program
Mandate quarterly public reporting on program costs and windfall account balances
Simultaneously accelerate the CNG and electric vehicle transition to ensure this is genuinely the last subsidy cycle.

Nigeria has the fiscal means. We have the domestic refining capacity. What we need is the EXECUTIVE will to protect our citizens while building toward a post-subsidy future.

This is not a return to failed policies. This is strategic macroeconomic management using unique circumstances that may not recur.


Respectfully submitted,

Lanre Animashaun ‘Alaye’
APC Ayobo-Ipaja LCDA.
March 30, 2026.[color=#006600][/color]

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