The Federal Government is overdrawing subsidy deductions by N85 billion monthly since January, calculations from the Forum of Commissioners of Finance of Nigeria showed.
Instead of the N74 billion monthly deductions provided for in the 2012 budget, the Federal Government has deducted a total of N304 billion from January to February, the Commissioners said in a memo sent to the Governors' Forum.
If the trend continues, government is likely to spend N1.9 trillion on subsidy by the end of this year.
In a memo to the governors' signed by chairman of the Forum of Commissioners of Finance of Nigeria Eze R. Echesi, the commissioners said that in the three months between December 2011 and February 2012, the Federal Government had already deducted N477.233 billion from the states.
The memo read: "If this trend continues for the next 12 months, this will amount to N1.909 Billion thereby making the 2011 figure a child's play.
"It is equally noteworthy that total subsidy deductions for the first two months of 2012 is N304.003 billion which amount is already higher than 2011 approved Federal budget of about N240 billion.
"We have also been informed that the approved budget for 2012 fuel subsidy is N888 Billion and this translates to N74.000 billion monthly. What is still not clear yet is whether this figure is meant to take care of both NNPC and PPPRA."
They said they had previously noted that subsidy deductions were far in excess of the 2011 Federal Government budget approval of about N1.2 trillion without any convincing justification, estimating that by the end of December 2011, Nigeria would have spent a whopping N1.5 trillion instead.
The commissioners informed the governors that the next month or two could prove pivotal, in view of the events of January, despite what appeared to be a downward trend in the subsidy figures, noting that some measure of fuel subsidy withdrawal appeared to have either been achieved or indeed had been achieved for now.
Sources in the Commissioners of Finance Forum confirmed the authenticity of the memo and said that government should come out plainly on what it wants to do about the subsidy.
"If you are removing fuel subsidy remove it. Right now it is not very clear what we are doing. Those who should talk about this should come out and do it," one of the sources said.
Last week, the thirty-six state governors met in Abuja warned that Federal Government was overspending in the name of subsidy deduction.
In January when government announced the total subsidy removal and hiked fuel pump price from N65 per litre to N143, Nigerians went on strike for days and government later reduced the price to the current N97 per litre