A Review of the Nigerian Energy Industry

Oil communities want derivation board established

10 December 2012, Lagos – Oil producing communities in Delta State, have petitioned the Chairman, Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), demanding among other things, that a DERIVATION BOARD whose members will be recommended for appointment by the President, on the advice of the leaders of oil and gas communities, be set up.

The communities, according to THISDAY report, Sunday, said in a letter signed by elders from six oil producing states including, Edo, Ondo, Akwa Ibom, Rivers, Delta and Bayelsa states, that the proposed derivation board should comprise an executive chairman, secretary and members, including a member from RMAFC.

The communities also demanded that the 13 per cent derivation fund accruing to the federation account directly from any natural resources, be paid as first line charge from the federation account to the communities.

“The 13 per cent Derivation Fund belongs exclusively to the oil and gas producing communities, which are the source of derivation. The oil facilities, flow stations etc. are located in the oil and gas producing communities, where oil exploration, exploitation and production, are being carried out, causing monumental degradation, pollution and health hazard etc. The 13% Derivation Fund is compensation and reparation for loss of fishing right and loss of productive farm land,” they reiterated.

They added that the chairmanship should rotate among oil and gas producing states every four years. The group also insisted that the 13 per cent Derivation Fund currently being managed by the State Governors in the oil and gas producing states was an aberration, adding that the Fund had been managed without regard to the oil and gas producing communities who
are owners of the Fund.

“In order to put this issue in proper perspective, a reproduction of Section 162 (2) of the constitution of the Federal Republic of Nigeria 1999 as amended thereof, is imperative at this juncture.

“That section provides thus: ‘The Federation shall maintain a special account to be called “the Federation Account” into which shall be paid all revenues collected by the Government of the Federation except the proceeds income tax of the personnel of the armed forces of the Federation, the Nigeria Police Force, the Ministry or department of government charged with responsibility for Foreign Affairs and the residents of the Federal Capital Territory, Abuja.

“The President, upon the receipt of advice from the Revenue Mobilization Allocation and Fiscal Commission, shall table before the National Assembly, proposals for Revenue Allocation from the Federation Account, and in determining the formula, the National Assembly shall take into account, the allocation principles especially those of population, equality of states, internal revenue generation, land mass, terrain as well as population density.”

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  • Interesting proposition. Indeed the current management of the 13 per cent derivation that accrues to the state governments in the Niger delta doesn’t inspire confidence at all.

  • Prince Robert Agba via Facebook

    The 13 per cent derivation funds, has been hijacked by the vagabonds IN POWER. we the indigence of some oil communities has not receiving ay dime from the 13 per cent derivation funds, so therefore, the State and Local Government of Delta State of Nigeria, should be ready to entertain the ruthlessness of we th marginalize ds sons and daughters of the Delta State Oil Producing Communities, 1. Mereje Community of Okpe Kingdom, 2. Oporoza Community of Gbaramatu Clan, 3. Ekpan Community of Uvwie Kingdom, 4. Ekwakwa Community of Agbarah Otor Kingdom. all in Delta State of Nigeria, and are among the oil producing communities of Niger Delta Region, we particularly in our family has been marginalized, whereas the government and the oil companies are using our various lands for their oil pipe lines and Refinery. we are coming to take our place by force, because we have waited for the people in power to use their heart of good governance and equal right and justice to make our portions available to us, but they refuses to think about our well being and human capital development, we’ll not relent our efforts to fight who ever is in control of our various shares in the Federal Government Allocated 13 per cent derivation funds for all oil producing communities. Thank You all as you read, and keep ths note for you will use ths to bear us witness sooner or later.

  • any which way na employment-abi? I dey laugh then.

  • Will it work?