The 14th Emir of Kano and former Central Bank of Nigeria (CBN) Governor, HRH. Muhammad Sanusi II has said the federal government is indulging in illegality by paying petroleum subsidies from the federation account.
Emir Sanusi spoke virtually as a panellist on Sustainable Development Goals at the just-concluded Nigerian Economic Summit held in Abuja.
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He also said the Nigerian daily oil consumption data is suspect, thus there is endemic corruption in fuel subsidy payments.
“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,” he said.
“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 Nigeria was importing 30 million litres of PMS per day after eliminating corruption. In 2019, the NNPC said we are importing 59m 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 doubled?” he asked.
On electricity tariff, he said it should also be stopped as even poorer countries are paying cost-reflective tariffs and enjoying uninterrupted electricity.
Chairman, the Nigerian Governors Forum and the Governor of Ekiti State, Mr Kayode Fayemi, also agreed that subsidy payments had to end for resources to be freed up for critical investments.
Meanwhile, the federal government says it will take care of petrol subsidy in the first six months of 2022.
The Minister of Finance, Budget and National Planning, Zainab Ahmed, who disclosed this at a panel session at the event, said “In our 2022 budget, we only factored in subsidy for the first half of the year; the second half of the year, we are looking at complete deregulation of the sector, saving foreign exchange and potentially earning more from the oil and gas industry.”
The Chairman of the Economic Advisory Council (EAC), Prof Doyin Salami, said he had argued for a long time on the issue of the subsidy.
He also said the Petroleum Industry Act (PIA) made the payment of subsidy of petrol illegal.
“With the PIA essentially, it makes illegal petrol subsidy and yes, there is a period where NNPC and the new regulatory agencies must calibrate themselves, but at the end of this period – and I think it is about six months, which explains why the minister has said for the first half of the year, there is a provision.”