Central Bank of Nigeria (CBN) Governor Sanusi Lamido Sanusi has revealed that Nigeria spent over N1.7 trillion on petroleum subsidy in 2011.
Sanusi, who was represented by CBN Deputy Governor Kingsley Mogalu, yesterday told the House of Representatives' ad-hoc committee investigating the subsidy regime that the money, paid to both the Nigerian National Petroleum Corporation (NNPC) and major marketers by the apex bank, was incomplete as it did not include fuel imported in December 2011.
"Some marketers still have outstanding payments. So, it is possible that there still could be payments to be made", he said. Sanusi, who noted that subsidy deductions from source by the NNPC begun in 2009, however said he neither knew who authorized them nor why they were authorized.
"We state that the primary responsibility of the CBN in the petroleum subsidy regime is limited to the confirmation of exchange rates and payments in respect of instruments received from the Debt Management Office subject to adequate funding of the domestic excess crude account (naira) by the Office of the Accountant General, as well as the formulation of foreign exchange policies, including those related to petroleum product imports. For the avoidance of doubt, the CBN is not a party to the determination of which oil marketer qualifies for subsidy or not.
"The concern arose mainly as a result of our perception of the implications of possible manipulations of the subsidy regime on the stability of the country's exchange rate, our external reserves and the banking system. As we know, non-performing bank loans to petroleum product marketing companies and for stock market transactions were a major contributory factor in the distress suffered by some Nigerian banks in 2008/2009, leading the CBN to undertake extensive reforms in the banking sector from mid 2009. It is lamentable that the payment of subsidy devalues the naira as it puts pressure on the foreign exchange. The CBN won't have a problem with deregulation as it will reduce demand on foreign exchange," he said.
DailyTrust