EbonyHerald Stores Ebony Herald News24
Related Articles
The Bayelsa State Government has faulted the way 13% derivation fund is been shared by the Nigerian National Petroleum Company Limited (NNPCL).saying as a limited liability company, it was supposed to produce, sell the product, while distribution of the derivation will only come from dividends.
The Technical Adviser to Governor Douye Diri on Treasury and Accounts, Mr Timipre Seipulo, stated this on Friday during the monthly transparency briefing of the state government income and expenditures in the months of June and July in Yenagoa, the state capital.
He however said that there is an ongoing discussion at the Federal Account Allocation Committee (FAAC) that the 13% derivation should come directly, especially from mineral resources and not NNPCL.
Seipulo also disclosed that the fuel subsidy removal by the Federal Government has not resulted in the increase of revenue allocation in the state, even when the subsidy removal has materially increase the revenue generated at the centre.
He explained that since the removal of fuel subsidy, allocation to the state has not increased.
“There is 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.
“The argument is that NNPC will produce, sales and distribution will only come from dividends, if that is done, we believe fuel subsidy removal should materially benefit the states.” He said.
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?
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.
