Former President Olusegun Obasanjo has called for an increase in the 13 per cent derivation allocated to Nigeria’s oil-producing states, saying the current arrangement is only a starting point.

Obasanjo made the call on Monday during the inauguration of the Crude Distillation Unit (CDU) of the Azikel Refinery in Obunagha, Yenagoa Local Government Area of Bayelsa State.

According to a report by the News Agency of Nigeria (NAN), the former president said oil-producing states and communities had not received a fair share of the benefits from the natural resources extracted from their territories.

You are right that the states and oil-producing communities have not got a fair deal so far. Thirteen per cent is the beginning,” Obasanjo said while addressing Bayelsa State Governor Douye Diri.

Obasanjo Commends Bayelsa Government

The former president praised Governor Diri for supporting the refinery project and commended the state government for its use of revenue to execute development projects.

He also urged Azikel Group President, Dr Azibapu Eruani, to ensure the refinery is completed within the next 12 months.

Obasanjo noted that the project had made significant progress since his previous visit about eight years ago. He encouraged the project’s technical team and financial partners to sustain their support until completion.

The refinery is owned by Azikel Petroleum under the Azikel Group and is expected to produce 2.5 million litres of petrol and two million litres of diesel daily, alongside other petroleum products.

Diri Demands Greater Benefits for Oil-Producing States

Speaking at the event, Governor Diri renewed calls for a review of the existing 13 per cent derivation formula, arguing that oil-producing states deserve a greater share of the wealth generated from their natural resources.

He criticised the Land Use Act, describing it as unfair to oil-producing communities because of the distinction between state control of surface resources and federal control of resources beneath the ground.

Diri maintained that the Niger Delta was not seeking to take all the revenue generated from its resources but wanted a greater role in decisions concerning their management and utilisation.

He also stressed the importance of enabling residents of Bayelsa and other Niger Delta states to participate actively in the petroleum industry.

The governor urged young people to acquire the necessary technical skills to benefit from employment and business opportunities that could emerge from the refinery.

Azikel Refinery Expected to Boost Industrialisation

Eruani said the refinery was established to make Bayelsa and the wider Niger Delta region active participants in the petroleum industry.

He described the installation of the Crude Distillation Unit as a major step towards completing the project, adding that the facility could help drive industrialisation and improve local refining capacity.

The refinery project has received support from the African Finance Corporation and the African Export-Import Bank, among other stakeholders.

Obasanjo’s call has renewed attention on the long-running debate over resource allocation, revenue sharing and the economic benefits available to communities where Nigeria’s crude oil is produced.

For oil-producing states, an increase in the derivation percentage could provide additional revenue for infrastructure, environmental restoration and community development.

Stay with GistZone for the latest Nigerian politics, business and economic news.