Former Emir of Kano, Muhammadu Sanusi II has disclosed that payment of fuel subsidy by the federal government is a “scam”.
According to the former CBN Boss, some people in power are making billions out of it.
Recall that petrol subsidy payments in the last seven months gulped N714 billion, reduced monthly revenue accrued to the federation account.
Fuel subsidy also known as under-recovery is the underpriced sales of premium motor spirit (PMS), better known as petrol.
Speaking on Arise Television on Friday, Sanusi said successive administrations continue with fuel subsidy payments despite damage to the nation’s revenue and economy.
The former Central Bank of Nigeria (CBN) argued that the economic reality of the country is a product of some “negative decisions” taken by successive administrations.
Sanusi said that the first problem of the country in terms of management of its petroleum resources is the assumption that Nigeria is an oil-rich country.
He further said that it does not make sense to think Nigerians need more cheap fuel when there are other basic things like healthcare, infrastructure, electricity and telecommunications.
“We’ve taken a number of negative decisions, and that has been the bane of successive administrations. The first problem, of course, is assuming that we are an oil-rich country.
“And this has always been the big joke for me. I remembered in 2011 when we were talking about the fuel subsidy debate when President Jonathan rightfully wanted to remove the fuel subsidy.
“I said to people we are producing two million barrels of crude oil for 160 million Nigerians, that is one barrel for 80 people. Saudi Arabia produces one barrel for three citizens. That is a rich country.
“You are producing one barrel for 80 and your share of the revenue of that barrel, maybe half, so you are producing one barrel for 160 people.
“These people (referring to Nigerians) need education, they need healthcare, they need infrastructure, they need electricity, they need telecommunications, they need agriculture and you decide that what they need more than anything else is cheap fuel. That does not make sense.”
He argued that successive administrations continue payment of fuel subsidies because some people in power are making billions of naira from the scheme.
He also alleged that most of the numbers from the country’s importation of petrol are “phantom”, stressing that “a lot of the petroleum subsidy that will say, it being paid is from phantom fuel that never came into this country”.
“The only reason it makes sense is that there are a number of people who control the levers of power, who are making billions and billions of dollars out of this scam that is called fuel subsidy.
“Otherwise, there is no reason why government after the government will continue, when the argument is clear that the damage to the economy is clear.
“We have this scheme called the subsidy, which is really a scam, and practically everything that comes in, goes right back out — to import petroleum products and pay subsidies on those products. I’m not saying subsidies, themselves, are bad but look at the numbers.”