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Oil Derivation Refund: A Demand For Immediate Release Of 40% To Oil Producing Communities In Ondo State, By Allen Sowore Esq

December 8, 2022

One mistake the people of Ilaje, Ese-Odo and by extension the entire Ondo South Senatorial District should not make,  irrespective of their political inclinations is to keep silence over the recent revelation by the Federal Government that Ondo, as one of the nine oil producing states in Nigeria, has indeed received her own share of the total refunds for Oil Derivation, Subsidy and SURE-P from the Federation Account. 


This is imperative moreso that there's still N1.1trn  outstanding to be remitted by the Federal Government.  According to a statement released  by the Senior Special Assistant to the President on Media and Publicity, Garba Shehu, on Friday 2nd December,2022,  Ondo state has so far received money under four  categories:


1st CATEGORY:  N477.2 billion  released to the nine states as refund of the 13 per cent derivation fund on withdrawal from Excess Crude Account (ECA) without deducting derivation from 2004 to 2019, leaving an outstanding balance of N287.04 billion.


2nd CATEGORY:  N64.8 billion as refund of the 13 per cent derivation fund on deductions made by NNPC without payment of derivation to oil producing states from 1999 to December, 2021. The benefitting states still have an outstanding balance of N860.59 billion windfall from the refunds, as approved by President Muhammadu Buhari.


Please read carefully, under withdrawal from ECA without deducting 13 per cent derivation from 2004 to 2019, CATEGORY 1 above, Ondo State, got N19.4 billion with an outstanding sum of N11.7 billion. This was  paid in eight installments between October 2, 2021 and January 11, 2022, while the ninth to 12th instalments are still outstanding.


On the 13 per cent derivation fund on deductions made by NNPC without payment of derivation, which falls under  2nd CATEGORY above,  the nine oil producing States got  N64.8 billion paid in three instalments this year, with the remaining 17 instalments outstanding. Ondo State received N3.7 billion.


3rd CATEGORY: All the nine states received N4.7 billion each, totaling N42.34 billion as refunds on withdrawals for subsidy and SURE-P from 2009 to 2015. The refund, which is for all the states and local government councils, was paid on 10th November, 2022.


4th CATEGORY:  The Federation Account also paid N3.52 billion each as refund to local government councils on withdrawals for subsidy and SURE-P from 2009 to 2015 on  the 10th November, 2022. 


In summary, Ondo state has collected N19.4billion+ N3.7billion+ N4.7 billion = N27.8 billion between 2021-2022. Also, each of the 18 local government councils in the state got N3.52billion in November, 2022. This is according to data obtained from the Federation Account Department, Office of the Accountant General of the Federation. 


As critical stakeholders, members of the PDP in Ondo South Senatorial District and most importantly, responsible citizens of this great nation with utmost patriotism; it behoves us to seek the good offices of Ondo state governor, Arakunrin Oluwarotimi Akeredolu SAN to Immediately release the 40% of the total Oil Derivation Refund collected so far by the state government from the Federation Account to Ondo State Oil Producing Areas Development Commission (OSOPADEC) in line with the provisions of Section 7  PART Ill and section 11 PART IV of OSOPADEC LAW 2003 ( as amended). 


Hopefully,  this will resuscitate the Commission from its present state of coma, financial lethargy and once again be alive to its statutory responsibility of the rehabilitation and development of major life changing projects particularly in  the oil producing communities and generally Ondo South Senatorial District. 


Therefore, it should be noted by all discerning minds and lovers of good governance, that the recent jejune, vapid and insipid press statement issued by the Chief Press Secretary to the governor, Olabode Richard feigning the true identity of a statement of  account - to explain away the humongous refund is insufferable and  unacceptable. 


The spirit and letters of section 121 of the 1999 Constitution of the Federal Republic of Nigeria (as amended) is lucid to the effect that a governor CANNOT spend money without first presenting it  either in the main  or  supplementary Appropriation Bill to the State House of Assembly for authorization and approval. 


It's therefore overreaching, ridiculous and heart wrenching that Mr Governor, who is a Senior Advocate of Nigeria, is attempting to deploy a mere press statement to perform the fundamental role of substantial budget as required by the Constitution. Interestingly, there's no previous budget- main or supplementary,  where such revenue and expenditure are captured as the statement pretended to elucidate. 


In spite of the enormous oil derivation fund accruing to the state, the people of Ilaje and Ese-Odo who are supposed to be the prime beneficiaries of the oil wealth  live in squalor and desecrated environment- a direct effect of oil exploration,  while the state government looks the other way. 


This deliberate abandonment of the proverbial  ' bird that lays the golden egg' must stop ! Ergo,  Governor Akeredolu is under an  impregnable obligation to immediately release the 40% of this Oil Derivation Refund to OSOPADEC and also account for all the 40% of the 13%  oil derivation that has accrued to Ondo state since February 24th 2017. 


Allen Sowore Esq

Director, Media and Publicity

PDP Ondo South Senatorial District Campaign Council