Governor Hope Uzodimma of Imo State said years of under-reporting and non-reporting of hydrocarbon production in the state have denied the state its royalties from oil companies operating within the state and 13 per cent derivation entitlement.
Mr Uzodimma disclosed this in a post on his official X handle on Thursday.
According to him, he stated this during a courtesy visit by the Chairman of the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), Mohammed Shehu, who led his team on a working visit to the state.
“We remain committed to addressing the long-term negligence to the under-reporting and non-reporting of hydrocarbon production in Imo State, which has denied the State its rightful earnings, both in royalties from oil companies operating within the State and from the 13 per cent derivation entitlement,” the Governor said.
Hydrocarbon is an organic compound consisting of hydrogen and carbon found in crude oil, natural gas, and coal. It is highly combustible and the main energy source of the world. Its uses consist of gasoline, jet fuel, propane, kerosene, and diesel, among others.
He noted that the state is “richly endowed with hydrocarbon resources and possesses the highest reservoir of natural gas in Nigeria.”
Given this immense potential, he said there is a compelling need for a comprehensive review of production records and revenue remittances to ensure accuracy and transparency.
Mr Uzodimma said the state government is readily available to fully work with RMAFC for resolution.
He commended the commission for its fact-finding mission and data collection exercise in the state.
“While I commended the commission and its team for undertaking this important fact-finding mission and data collection exercise, I appealed to the RMAFC, as an agency empowered by law to safeguard fiscal equity and accountability, to assist in rescuing Imo State from these anomalies,” he said.
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How 13 per cent derivation works
The derivation is a constitutional provision under Section 162, Sub-section 2 of the 1999 Nigerian Constitution. It mandates that 13 per cent of revenue from natural resources be returned to the states from where such resources are produced.
The derivation fund is paid to the states monthly to assist their oil-producing communities in tackling environmental pollution and degradation, the provision of basic amenities like healthcare, potable water and paved roads, and the economic empowerment of the community people.
Royalties are payments made by individuals or companies that extract mineral resources to the owner or rights holders of those resources.
