States shutting down
The states are equally affected by the dwindling oil revenue. The situation was so bad that some states had to go home empty handed in April after their statutory allocation was all deducted to service their debts.
About N32 billion was deducted from states allocations fro
m the Federation Account in April for different loans they incurred.
Osun states, for instance, had its allocation of N2.030 billion for the month wiped away by a deduction of N2.391 billion, leaving a deficit of N361 million.
Even the oil rich states are not exempted with Bayelsa state losing N3.207 billion out of its N4.812 billion for April to service debts.
Official figures show that the eight oil-producing states of Bayelsa, Rivers, Delta, Akwa Ibom, Edo, Imo, and Ondo, Abia shared only N20 billion as 13% derivation in July. This figure is less than 10 percent of their oil earning before the advent of the current oil crunch.
As a result of this, majority of the states in the Niger Delta are facing the twin challenge of payment of salaries and projects execution.
Experts react
“Apart from the economic downturn, we are losing value from the oil and gas end in terms of production, the price is not doing very well, it is a double whammy for the country,” said Akinyemi Akingbade, Lagos-based oil and gas expert.
“If government has plans of doing 2.2 million barrels and they are doing roughly 1.6m or less than that and with the price of crude very low, It is really very bad for the nation,” he said.
The Head of Energy Research at the Ecobank Group Dolapo Oni said the economic impact of attacks on oil assets in the region have been manifested in two w
ays.
He said that production volumes shut-in could have earned government substantial revenue.
“Even the little that is earned is channelled towards pipeline repairs,” Oni said.
Spokesman for the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) Emmanuel Ojugbana said although there had been no incidence of job losses the security and safety of oil workers in the region remained a major concern.
Ojugbana feared that if attacks continued unabated workers in the sector might lose jobs.
