Fuel discount is not subsidy – Presidency

Bayo Onanuga, the Special Adviser to President Bola Tinubu on Information and Strategy, has clarified the distinction between a fuel margin discount and a government subsidy in response to recent controversy surrounding the Federal Government's 30-day fuel discount plan. In a statement titled "Margin Discount and a Subsidy Are Not the Same," Onanuga explained that a margin discount occurs when a fuel retailer reduces or eliminates its profit margin, thereby passing the savings to consumers.

Onanuga asserted, "The ADC and NDC should carefully re-read this ministerial brief: Margin Discount and a Subsidy Are Not the Same." He further clarified that a subsidy involves the government paying a portion of the cost that would typically be borne by consumers, a measure that the current administration abolished in 2023. The essence of a fuel margin discount, according to Onanuga, lies solely in the retailer forgoing its profit margin to benefit consumers during the discount period.