Killing me softly with subsidies

One of the decisions taken by the National Assembly before the Christmas break was the appropriation of an additional sum of N161.6bn to augment the initial N888.1bn voted for subsidy in the budget of the outgoing year.  This would bring total fuel subsidy claims for 2012 to over N1.05tn; i.e. the equivalent of over 20% of the 2012 expenditure budget of N4.7tn.  The budget allocation of over N500bn for interest and service charges for domestic debt comes a distant second to fuel subsidy.

The Executive Secretary of the Petroleum Pricing & Regulatory Agency (PPRA) has defended the additional requirement for N161bn fuel subsidy as in order, and noted that the N888bn initially approved included arrears of N451bn from processed 2011 claims!  In any event, PPRA’s Reginald Stanley also observed that the consolidated allocation of N1.05tn in 2012 budget was a major improvement on the alleged total subsidy payment of N2.09tn in 2011.

However, the PPRA boss confirmed that “the processed claims up to July 2012 for P.M.S. alone stood at N605bn, and exceeded the approved balance of N437bn after the deduction of arrears from 2011”. (Punch 18/12/2012, pg. 23).

Source:Vanguard