Former President Olusegun Obasanjo has supported calls for an increase in the 13 per cent derivation fund allocated to oil-producing states, arguing that the current arrangement does not adequately compensate communities for the resources extracted from their land.
Obasanjo made the remarks on Monday during the flag-off of the crude distillation unit at the $1bn Azikel Refinery in Obunagha, Yenagoa Local Government Area of Bayelsa State.
Addressing Bayelsa State Governor Douye Diri, the former president said oil-producing states and communities had not received a fair share of the benefits from petroleum exploration.
“You are right that the states and oil-producing communities have not got a fair deal so far. Thirteen per cent is the beginning. You can continue to talk,” Obasanjo said.
Diri Demands Greater Share of Oil Revenue
Diri also renewed his call for a review of the revenue-sharing arrangement, insisting that the existing 13 per cent derivation allocation was inadequate for oil-producing states.
The governor argued that communities in the Niger Delta continued to bear the environmental and economic costs of oil exploration without receiving commensurate benefits.
He also criticised the Land Use Act, saying the division between state control of surface resources and Federal Government control of resources beneath the ground placed oil-producing communities at a disadvantage.
According to Diri, the region is not seeking to take all the proceeds from its natural resources but wants a greater role in deciding how they are managed.
“We do not want to take all to ourselves. We just want to be co-players in determining how it is done. Thirteen per cent is not enough for the states,” he said.
Obasanjo Praises Bayelsa Government
The former president commended Diri for what he described as the effective use of the revenue available to Bayelsa State, pointing to development projects across the state.
He also praised the promoter of the refinery, Azibapu Eruani, for sustaining the project and urged him to complete the facility within the next 12 months.
Obasanjo said the refinery could expand its capacity after completion, highlighting the importance of local investment in Nigeria’s petroleum industry.
$1bn Refinery Expected to Boost Local Processing
The Azikel Refinery is designed to process 25,000 barrels of crude oil daily. Its crude distillation unit marks a significant stage in the development of the facility.
Eruani said the project was intended to make Bayelsa and the wider Niger Delta active participants in the petroleum industry rather than remain primarily suppliers of crude oil.
The refinery is expected to produce petrol, diesel and other petroleum products, potentially supporting industrial development and employment in the region.
The renewed calls for a higher derivation allocation have brought the long-running debate over resource control, environmental justice and the distribution of Nigeria’s oil wealth back into focus.
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