Nigeria’s nine oil-producing states received a combined N1.51 trillion from the 13 per cent oil derivation fund in 2025, more than double the N671.92 billion shared in 2024, according to FAAC net derivation data.
The sharp increase underscores the continued dominance of crude oil production in shaping sub-national revenues, as higher distributable oil earnings and improved federation inflows significantly boosted allocations.
All nine beneficiary states recorded strong year-on-year growth in derivation receipts, reinforcing how fluctuations in crude oil revenue directly impact state-level fiscal strength.
The 13 per cent derivation fund is reserved exclusively for oil-producing states as compensation for resource extraction and environmental impact.
While VAT and statutory allocations contribute to total FAAC inflows, derivation revenue remains the single most decisive fiscal advantage for oil-producing states. In several cases, it accounts for a substantial share of their total net receipts.
Notably, despite similar geography, some oil-producing states earn significantly more derivation revenue than others, reflecting differences in production output and oil asset concentration.
The nine oil-producing states that received the 13 per cent derivation allocation in 2025 are
- Akwa Ibom
- Delta
- Rivers
- Bayelsa
- Edo
- Ondo
- Cross River
- Imo
- Abia
These states qualify as beneficiaries under the constitutional provision that allocates 13 per cent of oil revenue to producing states as compensation for resource extraction and environmental impact.
