By Alex Ter Adum, PhD
TAIWO OYEDELE’S VOODOO ECONOMICS AND NNPCL’S PUMP PRICE DISCOUNT VIDEO: SMART MARKETING, BUT ATIKU’S CRUDE DISCOUNT FOR LOCAL REFINING IS BAD ECONOMICS?
Taiwo Oyedele and NNPCL need to explain this double standard.
If NNPCL can discount petrol at the pumps and call it a commercial strategy, why is Atiku Abubakar’s proposal under the AERP to discount crude for local refining condemned as a subsidy?
Does changing the name change the economics? Is half a dozen no longer six?
Let’s examine the substance.
Tinubu’s 30-day pump-price discount targets petrol. Atiku’s proposed crude-feedstock discount for local refining targets the cost of domestic refining, with the potential to lower the cost of multiple petroleum products and stimulate wider economic activity across the petroleum industry value chain.
A barrel of crude yields multiple products and streams, not just petrol. More competitive local refining can support industries, create jobs, conserve foreign exchange, reduce dependence on imported petroleum products, and expand economic activity that generates tax revenue for the government.
That is the potential multiplier effect of supporting production through a subsidy, rather than limiting the intervention to the retail price of one product and baptising it a commercial discount to disguise the truth.
Of course, unlike them, Atiku’s AERP acknowledges that discounted crude has an opportunity cost to the FAAC. Its fiscal cost must, however, be transparently debated, capped, budgeted for, independently verified, tracked, and audited. Every qualifying barrel must be predetermined, accountable, and tied to verified domestic production and supply.
So, if NNPCL’s discount sacrifices profits and dividends that would otherwise accrue to the Federation, its potential cost to the public (FAAC) purse must equally be acknowledged. Calling one intervention a discount does not make its economic cost disappear.
So why is a temporary petrol discount presented as sound commercial thinking, while a properly designed crude discount to stimulate local refining is treated as inherently reckless?
The two interventions are different, but both must face the same test: cost to the public, savings to consumers, impact on domestic production, jobs, foreign exchange, and government revenue.
If the government can justify sacrificing a margin in an attempt to show that it is trying to make petrol cheaper for 30 days, it must explain why reducing feedstock costs to strengthen domestic refining to make all petroleum products continuously cheaper is beyond consideration.
Otherwise, this is not a serious economic debate. It is a contest in clever labelling.
But as Bob Marley famously put it, you can fool some people sometimes, but you can’t fool all the people all the time.
A pump-price discount may make a good marketing video. A production strategy that could benefit multiple industries deserves more than a dismissive sound bite.
The question is not which intervention has the better name. It is which delivers greater, measurable value to Nigerians.
Because half a dozen is still six, even when the government calls one a discount and the other a subsidy.
Alex Ter Adum, PhD
Director, Voter Intelligence & Strategy
ADC Presidential Campaign Council
