Former Governor of the Central Bank of Nigeria (CBN) Sanusi Lamido, has called for the removal of fuel and electricity subsidies in favour of sectors that could serve Nigerians long-term.
Lamido said the funding of fuel subsidy by President Muhammadu Buhari with capital from the federation account meant for the local, state and federal governments was illegal.
He noted this at the Nigerian Economic Summit held in Abuja on Tuesday, adding that money from the federation account shouldn’t be used for federal government expenditure.
“This money coming from petrol belongs to the federation account, and the federal government doesn’t have the constitutional right to pay subsidy on behalf of the federation.
“So it is a fundamental constitutional issue because this is money that should go to the federal, states and local governments. Yet money that belongs to the federation is carried out as federal government expenditure. So, there are so many complex issues, legal and economic issues. We need to stop these issues.”
His statement trailed the comment of the Finance Minister, Ahmed Zainab, who stated that the government will continue to pay subsidy on fuel importation until H2 of 2022.
Rise in crude oil fuelling corruption
The former Emir of Kano also questioned the simultaneous rise in crude oil price and importation, wondering why the volume of fuel importation doubles almost immediately Brent value appreciates.
Sanusi said this occurred during the Goodluck Jonathan administration, as well as President Buhari’s tenure. He cited importation movements from 30 million litres of PMS per day to 59 million litres per day between four years.
The investment banker was baffled by the factor(s) that influenced the consumption rise, “I have said this before even as a CBN Governor under the previous government. What I say is not of a particular government. Take petroleum subsidy.
“In 2015 or 2016, Minister Ibe Kachukwu said Nigerian was importing 30 million litres of PMS per day after eliminating corruption. In 2019, the NNPC said we are importing 59 million litres per day after oil prices have gone up. And I have been asking the question, what happened between 2015 and 2019 that our oil consumption has almost double?
“This is what also happened under the previous government. When oil prices go up, NNPC said they are importing more because of the arbitrage. Thus, when the oil prices go high, there is an incentive to inflate the number” Sanusi said.
He called on the government to redirect the capital on fuel subsidy to Education and Health sectors.
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