Muhammadu Sanusi II, former Emir of Kano, has described fuel subsidy as a “scam”, saying some powerful Nigerians are making billions of dollars from it.
Sanusi said this in an interview with Arise Television on Friday.
The federal government recently revealed that petrol subsidy payments gulped N714 billion in the last seven months, reducing 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.
According to Sanusi, the economic reality of the country is a product of some “negative decisions” taken by successive administrations.
The former governor of the Central Bank of Nigeria (CBN) argued that it does not make sense to think that Nigerians need cheap fuel more than other basic things like healthcare, infrastructure, electricity and education.
“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”, he said.
“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”.
Sanusi stated that successive administrations continue with fuel subsidy payments because “people who control the levers of power” benefit from it.
“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,” he stated.
“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.”