Former Governor of the Central Bank of Nigeria (CBN) and ex- Emir of Kano, Muhammad Sanusi yesterday listed the benefits of removing subsidy on petrol and further advised the federal
government to implement structural reforms that would remove every vestige of subsidy in the system in order to attract productive investments.
Sanusi gave this advice during an interview on ARISE TV that dwelt on the Nigerian economy and his activities in helping less privileged children and women to have access to better education and healthcare in furtherance of the attainment of the
Sustainable Development Goals (SDGs).
He stated that the subsidies on petroleum products made Nigeria the only oil exporting country that does not enjoy the benefits of increase in the price of crude oil in the international.market.
“First of all, we fix the price for petroleum products even though we do not refine petroleum products. How can you fix the price of a product that you do not produce? We produce.crude oil but the price we fix is for refined products.
So, if crude oil price goes up, the price of refined petroleum.also goes up internationally from where we are importing. We
will get the benefit of high crude oil and then we lose it immediately because we have to pay more as subsidy for importing petroleum products. So, we are the only oil.producing country that does not see the benefit of rising oil prices. The bulk of whatever we get whenever the price of.crude oil goes up also goes out immediately on importing.petroleum product and the so called subsidy payment,” Sanusi
said, adding that the “central bank can only give us single
exchange rate only if the central bank has a steady flow of.foreign exchange.”
He proposed that the structural reforms should also aim at bringing transparency into the activities of the Nigerian National Petroleum Corporation and deal with pre-existing.conditions set up to fail at every unanticipated crisis.
Sanusi noted that these pre-existing conditions include the multiple.exchange rates regime of the Central Bank.
“The recently announced conditions, such as the IMF’s.recommendations on removal of fuel subsidy, though painful,.are the necessary structural adjustments we need to make in.order to improve the revenue profile of the government.
“I think it is about fundamentally thinking on how we will re- structure our economy in terms of development as opposed to rent seeking,” he said.