The CBN boss was present at today’s town hall meeting organised by the Newspapers Proprietors Association of Nigeria (NPAN) on the topic: “Removal of Fuel Subsidy: In whose Interest?”
He said: “When oil prices crashed in 2008 from N147 per barrel to N37, the only reason the country’s economy is still growing was that there was a $62billion reserve. Today, there is no such shock absorber. If the oil price crashes again by about 30-40 per cent, and Naira exchanges at the rate of N200 to the dollar, while inflation rises to 18 per cent, that will be the end. I am willing to guess that this policy will never be a popular policy. If people are paying N65 per litre, and government is saying they should pay N140 per litre, it is not going to be popular.
Sanusi added that given the choice between picking the popular policy, which is to continue paying the fuel subsidy, or one that is right for the country, the Government “is willing to be unpopular”.
“The way forward is for Nigerians to take a decision between the cost on the economy of removing or not removing fuel subsidy. The government can continue to pay fuel subsidy till 2015, it will not come down. But, the next government would be saddled with a debt burden that it will not be able to maintain,” he argued.
However, Silver Bird Group president, Ben Murray Bruce said the government must give something back if the oil subsidy has to go.
