The Petroleum Products Pricing Regulatory Agency (PPPRA), yesterday, has disclosed that the federal government may spend N1.23 trillion on fuel subsidy payments by the end of the 2012 fiscal year.
PPPRA's projection shoots up subsidy payments as recently announced by President Goodluck Jonathan for 2012 by N189 billion.
It would be recalled that Jonathan had, last week, written both arms of the National Assembly - Senate and House of Representatives - requesting supplementary appropriation for an additional N161, 617,364,911 billion over and above the N888.1 billion approved for payment of fuel subsidy in 2012.
PPPRA's Executive Secretary, Mr Reginald Stanley, made the discosures of new projected fuel subsidy spendings at a meeting with the Joint House Committees on Finance, Appropriation, Petroleum Upstream and Petroleum Downstream.
Last Thursday, House Speaker, Aminu Waziri Tambuwal, had detailed the joint committees to verify Jonathan's N161, 617,364,911 billion request as well as a forensic audit conducted by the presidency that arrived at the said sum. The joint committees are also expected to establish actual consumption figures of subsidised petroleum products.
PPPRA's Executive Secretary while justifying Jonathan's request said going by the trend of relevant indicators, the federal government might spend as much as N1.23 trillion by the end of the year.
In his presentation to the House joint committees, Stanley explained that the N888.1 billion initially budgeted for fuel subsidy included N232billion earmarked for the payment of fuel subsidy arrears arising from 2011 subsidy claims and N650billion for 2012 claims.
He disclosed that 2011 arrears shot up to N451billion leaving N437billion for 2012 payments. He said already, N605billion subsidy claims have been processed and awaiting payment.
"The total projection of about N1.23trillion should not scare anybody because we are an oil producing nation and we are reaping at the upper part of the deal in terms of higher prices for crude oil. In the same vein, we should not also forget that about 95 per cent of the products are imported," he said.
Jonathan, in his request letter to the National Assembly, said that the extra fuel subsidy cash needed to settle accumulated fuel subsidy arrears owed oil marketers, would assist to "maintain a steady flow of petroleum products, especially in the run-up to the festive season."