N1.76trn Paid in Subsidy in 2011 Alone, CBN Tells House of Reps Committee.

CBN Governor Lamido Sanusi

Members of the ad hoc committee of the House of Representatives probing the federal government’s so-called subsidy on petrol had to brace themselves today as a Deputy Governor of the Central Bank, Mr. Kingsley Moghalu, told them N1.76trn was the total amount paid on it in 2011 alone.  

Mr. Moghalu’s testimony is in line with previous accounts which described an inexplicable and whopping increase in the spending on the item under Mr. Jonathan.

Mr. Moghalu, who was representing CBN Governor Sanusi Lamido Sanusi, explained, however, that the role of the bank in fuel subsidy management is limited to ensuring ensure monetary and price stability.  It is not involved in paying the subsidy, he said.  

He also told the committee that the level of the subsidy went up eight-fold in 2009, totaling over 110 percent.  By October 2011, it hit over 500 percent.

Asked why there was a sudden increase in subsidy payment, Mr Moghalu suggested “likely manipulations,” as previously observed by other senior officials of the government who have testified before the committee, but that the Central Bank lacked concrete evidence “because we are not EFCC.”

Also queried on who authorizes payment of the subsidy, he said that was the purview of the fiscal authorities.