The Nigerian Extractive Industries Transparency Initiative (NEITI) will begin providing baseline information and data on the use and management of 13 percent derivation paid to oil producing states as well as details of the country’s petrol consumption, the organisation’s head said in Abuja on Tuesday.
This development will provide critical data required to monitor how much is being allocated monthly to oil-producing states and their management is a fraught political issue as states with solid minerals have canvassed to be included in the list.
Petrol consumption in Nigeria has been the subject of intense interest following the removal of subsidies. Prior to scrapping petrol subsidies, petrol consumption was officially said to be around 66 million litres daily, but the bulk of that reportedly was smuggled outside the country. Since its removal, consumption has fallen by a third, according to figures from the government regulator.
Ogbonnaya Orji, head of NEITI at a presentation at a consultative forum meeting with civil society and the media, said the baseline study is important to determine if the states are getting their dues and if the government is paying what they should.
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“It’s a special report we are commissioning this year alongside the oil and gas report. We are also commissioning a study on the actual PMS consumption in Nigeria, an independent report to establish the quantity of fuel Nigeria consumes and its costs, it will be used to manage the sector as subsidy is removed,” said Orji.
The 13 per cent derivation fund distributed among the nine oil-producing states in Nigeria rose by 115.5 per cent to N970.2 billion in 2022, following improvement in the price of crude oil in 2022 according to figures by the National Bureau of Statistics.
Representatives of civil society groups commended the move, with some calling it ‘revolutionary’. They suggested that credible civil society organisations and states that have set up commissions on the fund should be included in the study. Others suggested other possible reports to gather, including on artisanal refining.
