Obasanjo urges increase in 13% derivation for oil-producing states

Former President Olusegun Obasanjo on Monday advocated an increase in the 13 per cent derivation allocated to oil-producing states.

Obasanjo ​‌‍‍‍‍⁠⁠‍​‍​‍​⁠‌⁠‌​spoke at the inauguration of the Crude Distillation Unit (CDU) of Azikel Refinery at Obunagha, Yenagoa Local Government Area of Bayelsa.

The News Agency of Nigeria (NAN) reports that the one-billion-dollar refinery project is owned by Azikel Petroleum, under the Azikel Group.

The refinery is expected to produce 2.5 million litres of petrol and two million litres of diesel daily, alongside other petroleum products.

Obasanjo commended Azikel Group President, Dr Azibapu Eruani, for initiating the project and urged him to ensure its completion within 12 months.

He also appreciated the refinery’s technical and engineering team, African Finance Corporation (AFC) and Afreximbank for supporting the project.

The former president called for continued support to facilitate the refinery’s completion, noting that its development had progressed significantly since his previous visit.

Obasanjo also commended Gov. Douye Diri of Bayelsa for supporting the project and effectively utilising the state’s revenue, citing numerous development projects.

“I have told Dr Eruani that I will be officially 90 years by next March. It means I will take the boarding pass soon.

“He has to make sure the project is completed before I exit,” he said.

Addressing Diri, Obasanjo said Eruani had consistently acknowledged the governor’s critical contribution to the refinery project.

“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. The most important thing is that even the little you have received, you have used it well,” he said.

Obasanjo challenged Eruani to complete the refinery within the next 12 months, adding that its capacity could subsequently be doubled.

Speaking earlier, Eruani said the refinery would kick-start industrialisation in Bayelsa and the wider Niger Delta region.

He recalled that Obasanjo laid the refinery’s foundation eight years ago, describing the installation of the CDU as a major step toward completing the project.

Eruani said the refinery was conceived to make the Niger Delta an active participant in the petroleum industry.

He described it as the country’s second-largest full-scale refinery and commended President Bola Tinubu for supporting indigenous refineries.

According to him, local refining aligns with the Federal Government’s vision of making petroleum products available and affordable.

Eruani also appreciated Diri, AFC and Afreximbank for their contributions to the project.

In his remarks, Diri said the refinery vindicated years of agitation by Niger Delta communities against perceived injustice in the petroleum industry.

He argued that communities producing crude oil deserved to become key participants in the industry and benefit more substantially from their natural resources.

The governor criticised the Land Use Act and the existing 13 per cent derivation formula, insisting that oil-producing states deserved a greater share of their resources.

“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.

Diri said the region was not seeking to take everything for itself but wanted to participate meaningfully in decisions concerning its resources.

“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,” he said.

The governor expressed delight that the refinery would position Bayelsans to participate more actively in the petroleum industry.

He urged residents to equip themselves with the necessary skills to benefit from the opportunities the project would create.

Diri also stressed that Africa must process its own natural resources to maximise their economic benefits.

He called on oil companies operating in the Gbarain/Obunagha area to complement the state government’s efforts by rehabilitating the road leading to the refinery.

(NAN)

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