Sanusi who said this during an interview session in commemoration of his 4th year on the throne explained that subsidy regime in the Nigerian National Petroleum Corporation has compromised the corporation to the extent that unless you are an angel be able to run the corporation honestly.
Sanusi was suspended as the Governor of the Central Bank of Nigeria by the then President Goodluck Jonathan in 2014 after accusing the NNPC of failing to remit $20bn into the government’s coffers despite high oil prices.
He had also complained about the lack of transparency at the nation’s top oil firm occasioned by the dubious payment of petroleum subsidy.
When asked if he was satisfied with how the NNPC was being run under the current administration, the emir said no law or regulation had been put in place to change how things were being done in the corporation.
The emir said, “I have not seen a change in laws or regulations that will institutionalize any changes. It is far more important to put in place the institutional changes that make it impossible for things to be done.”
While insisting that the payment of subsidy on petroleum products must be scrapped immediately, Sanusi said the problem of NNPC was beyond the change of its leadership.
He added, “It is not about the persons in the NNPC but about whether anyone can make a system operate honestly when there are such huge arbitrage opportunities. We need to import angels for that to happen.
“So, for me, these are the issues. It is an economist’s nightmare. Sadly the very reason this subsidy should be scrapped is probably the reason it never will be. For those who profiteer from it, it is just too good to be true.”
The monarch, who described subsidy payment as ineffective, said its continuous payment was a “recipe for bankruptcy”.
The former CBN governor added, “The petroleum minister has disclosed that this government has spent N1.4tn already on fuel subsidy and for most of this period, the oil price was between low and moderate.
“You can imagine how much we will pay as oil price goes up. Imagine if that money had gone into the power sector or agriculture and education and health. So for me, this government inherited a bad situation but if it continues with these programmes, the next government will also inherit a bad situation which is a shame.”
Explaining the manner in which petroleum subsidy is paid, the emir said when the global price of crude oil increases, Nigeria fails to benefit because the government increases the payment on subsidy.
He said, “What we have is not a subsidy. The Federal Government guarantees Nigerians a maximum price per litre for fuel. And this is a product we import. And its price is based on unpredictable underlying commodity prices.
“So what the Federal Government is saying is look it does not matter what the price of oil is internationally, what the exchange rate is, what interest rate is, what shipping clearing and demurrage is, I am so rich that I will ensure you get fuel at this maximum price and I will pay the difference.
“Meanwhile, the balance sheet of the Federal Government is not hedged in any way against these risks. As a professional risk manager, I have never seen a policy that is so guaranteed to bankrupt anyone as this policy.”