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It’s Illegal to Pay Fuel Subsidy from Federation Account – Sanusi tells FG

Former Emir of Kano, Alhaji Muhammad Sanusi II, has said the federal government is indulging in illegality by paying petroleum subsidy from the federation account.

The former Central Bank of Nigeria (CBN) governor spoke virtually as a panelist on Sustainable Development Goals (SDGs) at the just concluded Nigerian Economic Summit held in Abuja.


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. Yet money that belongs to the federation is carried out as federal government expenditure. So, there are so many complex issues, legal and economic issues. We need to stop these issues” he said.

He also advocated for the end of fuel subsidy and electricity subsidy, saying the money saved should be invested in critical sectors like education and health adding that the long-term gains far outweigh the short-term pains.

“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 Nigerian was importing 30 million litres of PMS per day after eliminating corruption. In 2019, the NNPC said we are 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 oil consumption has almost double?” he asked.

He noted that “this is what also happened under the previous government. When oil prices go up, NNPC said they are importing more because of the arbitrage. Thus, when the oil prices go high, there is an incentive to inflate the number” he noted.

On electricity tariff, he said it should also be stopped as even poorer countries are paying cost reflective tariffs and enjoying uninterrupted electricity.

The 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 free up for critical investments.

He also said that the government must focus on education and healthcare provision.

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