Former President Olusegun Obasanjo has backed calls for an increase in the 13 per cent derivation allocation to oil-producing states, describing the current rate as inadequate.
Obasanjo spoke on Monday at the inauguration of the Crude Distillation Unit of the $1 billion Azikel Refinery in Obunagha, Yenagoa Local Government Area of Bayelsa State.
He said oil-producing states and communities had not received a fair share of the benefits from resources extracted from their territories, adding that the existing 13 per cent allocation should be a starting point for further negotiations.
“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,” he said.
The former President also challenged the President of Azikel Group, Dr Azibapu Eruani, to complete the refinery within 12 months, commending his commitment to the project.
The refinery, designed to process 25,000 barrels of crude oil daily, is expected to produce 2.5 million litres of petrol and two million litres of diesel daily, alongside other petroleum products.
Also speaking at the event, Bayelsa State Governor, Senator Douye Diri, criticised the existing derivation formula and the Land Use Act, describing them as unfair to oil-producing communities.
Diri said the Niger Delta had endured years of resource exploitation without receiving commensurate benefits.
“The Land Use Act is unfair. Surface resources belong to states but what lies underneath belongs to the Federal Government. That law is obnoxious and not good for any just society,” he said.
The governor maintained that oil-producing states were not seeking complete control of their resources but wanted greater participation in decisions concerning their management.
“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,” Diri said.
He also urged Bayelsa youths to acquire relevant technical skills to take advantage of employment opportunities expected from the refinery.
Earlier, Eruani said the refinery was designed to promote industrialisation, create economic opportunities and strengthen indigenous participation in Nigeria’s petroleum sector.
He commended President Bola Tinubu for supporting indigenous refinery development, expressing optimism that the project would improve the availability and affordability of petroleum products.
The foundation of the refinery was laid by Obasanjo about eight years ago. Upon completion, the project is expected to boost economic activities in Bayelsa State and the wider Niger Delta region.
