Muhammadu Sanusi, emir of Kano, says only angels can run the Nigerian National Petroleum Corporation (NNPC) in a transparent manner.
Speaking with PUNCH in commemoration of his fourth year on the throne, Sanusi said payment for subsidy should be scrapped.
The monarch said money paid for subsidy could make changes in the power, agriculture, education and health sectors.
“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,” he said.
“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 petroleum minister has disclosed that this government has spent N1.4trn already on fuel subsidy and for most of this period, 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.”
The emir said government’s attitude could lead the country into bankruptcy.
“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,” Sanusi said
“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 anyway against these risks. As a professional risk manager, I have never seen a policy that is so guaranteed to bankrupt anyone as this policy.”