N900b Petrol Subsidy: Sanusi Slams Corruption Under Buhari

By Tosin Olatokunbo

Lamido Sanusi, a former CBN Governor says the Buhari administration’s petrol importation and subsidy regime is still riddled with corruption.

The former CBN boss said the administration has failed to tackle the corruption regime that tarnished the image of his predecessor, Goodluck Jonathan.

The former CBN governor said petrol import figures were still being inflated by the NNPC and marketers, which may have resulted in the bogus subsidy claims. The federal government said it spent over N150 billion monthly on petrol subsidy this year even as it provides another N900 billion in the 2022 for the regime.

Sanusi made the suggestion on the back of the federal government’s decision to end the subsidy regime in the fist half of next year. Zainab Ahmed, the minister of Finance said on Monday that provision for subsidy was only made for the first six months of next year after which full deregulation will take effect.

“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,” Ahmed said.

Until May 2016, when the Federal Government announced a new petrol price band of N135 to N145 per litre of petrol, private marketers imported petrol into the country and were paid subsidy claims by the government in order to keep the pump price lower than the expected open market price of the product.

The Nigerian National Petroleum Corporation, which has been the sole importer of petrol into the country in recent years, has been bearing the subsidy cost. It does the importation through the Direct Purchase Direct Sale arrangement.

Under the DSDP scheme, selected overseas refiners, trading companies and indigenous companies are allocated crude supplies in exchange for the delivery of an equal value of petrol and other refined products to the NNPC.

Sanusi said the successor administration of President Buhari has failed to tackle the fuel subsidy corruption.

According to him, “in 2015 or 2016, Minister Kachikwu came out and said Nigeria was importing 30 million litres of fuel a day after eliminating corruption and having transparency.

“In 2019, the NNPC came out and said we were 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 consumption doubled?

“This was the same thing that happened under the previous government; in Nigeria, when the oil price goes up – unlike all other products when it gets more expensive, you have a reduction in demand – the NNPC says we are importing more.

“Why because as the price of oil goes up, the arbitrage between the subsidised price and the market price is so high; there is an incentive to inflate those numbers.”

The claim by NNPC that it imports over 55 million litres of petrol daily, Sanusi said has been grossly disputed insisting that corruption persists despite government’s promise to tackle it.

He said, “I have produced evidence before the National Assembly historically of cases where the NNPC would say we have imported fuel, use the name of a vessel – people say they imported fuel; you go and check and the vessel was nowhere near Nigeria on the day they said it was in Lagos, and people have collected subsidy on those things.

“For me, all the drawbacks of this regime, what it is costing Nigeria is not just the cost of subsidy; it is the cost of the corruption. What we need to do is to scrap it.”