Fuel subsidy proposal may scare investors, IMPI warns

The Independent Media and Policy Initiative (IMPI) has expressed concern that former Vice President Atiku Abubakar's proposal to reintroduce fuel subsidies could deter foreign investment and undermine regulatory confidence in Nigeria. IMPI's Chairman, Omoniyi Akinsiju, warned that the proposal could send a negative signal to international investors, signaling a return to regulated petrol pricing after over three years of deregulation efforts.

The group argued that Atiku's plan, which advocates shifting from consumption to production subsidy, could lead to uncertainty for investors due to politically determined pricing arrangements. Such an arrangement, IMPI claimed, would require eligible refineries to receive discounted crude allocations to pass savings to consumers, which Akinsiju described as convoluted and potentially stifling commercial operators.

The proposal, IMPI warned, would create an illusion of price reduction while shifting the cost of the subsidy from direct government payments to discounted crude oil allocations. This, they argued, could result in fuel shortages in remote areas and encourage the growth of black markets. IMPI emphasized that the government should instead prioritize investments to increase productivity and reduce the structural cost of doing business, rather than returning to fiscal policies responsible for past infrastructure deficits.