The Petroleum Products Pricing Regulatory Agency said in Lagos on Thursday, that N218.5bn is to be paid as subsidy to importers of petroleum products for imports made between January and October 2006.
The amount exceeds the N150bn set aside for the Petroleum Support Fund by the Federal Government in the 2006 budget to cushion the impact of the volatility of petroleum prices in the country.
The Executive Secretary, PPPRA, Dr. Oluwole Oluleye, while giving a breakdown of the figure, said the agency would pay N201.02bn to the Nigerian National Petroleum Corporation while other marketers would be paid N17.48bn.
He said the agency, having studied the trend as at June this year, had made a proposal to President Olusegun Obasanjo, for an additional N100bn for 2006.
In order to meet the shortfall, President Obasanjo had made a proposal to the National Assembly that N100bn be made for appropriation for the PSF in 2007,� he added.
The executive secretary, however, parried questions on whether the Federal Government would raise the prices of petroleum products in 2007, but remained hopeful of the availability of supplies.
I cannot say exactly whether the prices of petroleum products will increase or not,� he said.
President Obasanjo has proposed a reduction in the PSF from N150bn in 2006 to N100bn in 2007, sparking fears that the government was embarking on a tactical withdrawal from subsidising petroleum supplies in the domestic market.
The Manufacturers Association of Nigeria has faulted the move to remove fuel subsidy, saying the policy would raise the cost of petroleum products and by extension the cost of production.
However, Oluleye said with oil prices hovering around $60 per barrel and the N100bn budgeted for 2007, pump prices of petroleum might not be affected.
Speaking on the theme, The Challenges of Downstream Deregulation,� Oluleye said oil marketers had responded positively since the implementation of the PSF.
To ensure transparency and accountability, he said all stakeholders were involved in the implementation of the subsidy fund.
He explained, The PSF was established in such a way that it shall be financed from two projects namely, the federal, state and local governments and the accruals realised during the period of over-recovery. Over-recovery refers to the period at which the PPPRA recommended price is higher than the market determined price.�
According to him, between March and September, 2006, Total, Oando, Texaco and MRS sourced and brought in products.
Other marketers such as Ascon NIPCO and Honeywell had shown strong commitment to doing the same. There are also lots of vessels on the high sea that are bringing in products,� he added.