Speaking at the Risk Management Conference organised by the Central Bank of Nigeria, CBN, he said despite the reform of the fuel subsidy, the system still allow for abuse and banks need to be wary of such abuses and the risk it poses to their operations
He said: “It has been proved that subsidy creates incentives for abuse and Nigeria still allows the abuse. It is still fraught with abuse”.
Aig-Imoukhuede, who headed the Presidential Committee to Review the Fuel Subsidy Regime, said the work of the committee, among other things, revealed that while the major oil marketers behave themselves and complied with the procedure, the independent marketers, especially the portfolio marketers, see the fuel subsidy as a game and opportunity to make money overnight.
This coupled with the thin margins, caused them to abuse the system to make money. He said these marketers exploited the ignorance of banks, and took advantage of loan generation process to abuse the system.
The work of our committee has reduced the abuse significantly but there is still abuse.
Consequently, he advised banks to be cautious when dealing with oil marketers.