The Bayelsa State Government has faulted the sharing of the 13% derivation fund by the Nigeria National Petroleum Company Limited (NNPCL), saying as a limited liability company, it was supposed to produce and sell the product, while distribution of the derivation will only come from dividends.
The state government also said there is an ongoing discussion at the Federal Account Allocation Committee (FAAC) that the 13% derivation fund should come directly to states and not NNPCL, especially the funds derived from mineral resources.
The Technical Adviser to Governor Douye Diri on Treasury and Accounts, Mr Timipre Seipulo, who disclosed this yesterday during the monthly transparency briefing of the state government in Yenagoa, the state capital, stated that since the removal of fuel subsidy, allocation to the state has not increased.
While reeling the incomes and expenditure of the state government, Seipulo lamented that even when the subsidy removal has materially increased the revenue generated at the centre, the states are yet to experience an increase in revenue allocation.
He said: “The fuel subsidy removal has increased revenue materially, but the figures we have called have not reflected our expectation. If you look at the April report, our FAAC was about N23 billion, in May it was N21 billion, June N19 billion, July N21 billion and August was still less, so the question is what is the effect of fuel subsidy removal on our funding?
“There is an ongoing discussion at the FAAC level that instead of the 13% derivation, the sharing is expected to come directly from the production and sales, and the argument is based on Section 162 provision of the constitution that the 13% derivation, especially from mineral resources and others coming through NNPCL, a limited liability company is not proper.
“The argument is that NNPCL will produce, sales and distribution will only come from dividends, and if that is done, we believe fuel subsidy removal should materially benefit the states,” he said.
He said the total income into the state from FAAC, IGR and other sources for the month of June stood at N30.972 billion, while for the month of July, it was N32.939 billion.