Nigeria’s Oil-Producing States Share N28bn in One Month
Oil producing states in the country shared N28.22 billion under the 13 per cent derivation appropriation in May 2023, the Central Bank of Nigeria (CBN) has stated.
The CBN, in its Monthly Economic Report for May 2023, stated that the amount shared by the states in May 2023 was 19.6 per cent lower than the N35.1 billion shared in April 2023, adding that it was also 41.8 per cent lower than the N48.49 billion shared among the states in May 2022.
Data from the CBN report further revealed that the amount shared by the states in the month under review represented 12.67 per cent of total oil earnings in the month of May 2023.
The oil-producing states currently benefiting from the 13% Derivation fund are Delta, Akwa-Ibom, Bayelsa, Rivers, Edo, Ondo, Imo, Lagos and Abia.
In general, the CBN said: “A net balance of N655.93 billion was shared among the three tiers of government, of which the Federal, State, and Local governments received N248.81 billion, N246.52 billion and N160.60 billion, respectively.
“Of the allocation to States, N28.22 billion was appropriated for the 13% Derivation Fund to oil-producing states. The amount distributed was 8.2 per cent and 39.8 per cent below the level in the preceding month and the monthly target, respectively.”
Furthermore, the CBN stated that earnings from crude oil weakened, due to a decline in the prices of crude oil, exacerbated by the United States’ debt situation.
It said: “Consequently, provisional data shows that crude oil and gas export receipts fell by 3.8 per cent to $4.06 billion, from $4.22 billion in April. A breakdown reveals that crude oil export receipts declined by 4.2 per cent to $3.58 billion, from S$3.73 billion in the preceding month. Similarly, gas export receipts fell by 2.1 per cent to $0.49 billion, from $0.50 billion in April.”
Particularly, the bank noted that the average spot price of Nigeria’s reference crude oil, the Bonny Light (34.9° API), dipped by 11.16 per cent to $76.91 per barrel (pb), from US$86.57 pb in the preceding month.
It added that a decline was also recorded in the prices of UK Brent at $76.95 pb, Forcados at $77.24 pb, WTI at $72.34 pb, and OPEC Reference Basket (ORB) at $75.70 pb.
The bank also reported that domestic crude oil production rose to 1.18 million barrels per day (mbpd), while crude oil export rose to 0.73 mbpd mainly due to the lifting of a force majeure by Exxon Mobil, following the suspension of industrial action by the workers’ union.
It said: “Data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) showed that Nigeria’s crude oil production rose by 19.2 per cent to 1.18 mbpd in May, from 0.99 mbpd in the preceding month.
“Of the 1.18 mbpd produced, 0.45 mbpd was allocated for domestic consumption, while 0.73 mbpd was exported. Nigeria’s production level remained below the OPEC monthly quota of 1.742 mbpd by 0.562 mbpd.”
Source: Sweetcrude
