Oil Revenue Derivation
Oil revenue allocation has been the subject of much contention well before Nigeria gained its independence. Allocations have varied from as much as 50%, owing to the First Republic's high degree of regional autonomy, and as low as 10% during the military dictatorships. This is the table below.
| Year | Federal | State* | Local | Special Projects | Derivation Formula** |
|---|---|---|---|---|---|
| 1958 | 40% | 60% | 0% | 0% | 50% |
| 1968 | 80% | 20% | 0% | 0% | 10% |
| 1977 | 75% | 22% | 3% | 0% | 10% |
| 1982 | 55% | 32.5% | 10% | 2.5% | 10% |
| 1989 | 50% | 24% | 15% | 11% | 10% |
| 1995 | 48.5% | 24% | 20% | 7.5% | 13% |
| 2001 | 48.5% | 24% | 20% | 7.5% | 13% |
* State allocations are based on 5 criteria: equality (equal shares per state), population, social development, land mass, and revenue generation.
**The derivation formula refers to the percentage of the revenue oil producing states retain from taxes on oil and other natural resources produced in the state. World Bank Report
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