Revenue from crude oil taxes and mineral-related earnings accounted for about 66 per cent of the N1.818 trillion disbursed by the Federation Account Allocation Committee (FAAC) for June 2025.
In a statement at the weekend, the Director of Press and Public Relations at the Office of the Accountant General of the Federation, Bawa Mokwa, confirmed that statutory revenue formed the largest chunk of the distributable pool, driven primarily by receipts from the oil sector.
The allocation, which marked a N159 billion or 9.6 per cent increase from the previous month, was largely propelled by stronger inflows from Petroleum Profit Tax and other oil-based revenues.
The FAAC meeting, held in July in Abuja, saw representatives from all levels of government review national revenue performance and approve the disbursement.
Gross statutory revenue jumped from N2.094 trillion in May to N3.485 trillion in June, a month-on-month increase of N1.390 trillion.
This spike was largely attributed to a surge in Petroleum Profit Tax collections, reflecting stronger earnings from upstream oil operations.
From this pool, over N1.018 trillion was distributed to the three tiers of government.
In addition to the statutory revenue, oil-producing states received derivation payments exceeding N120 billion, drawn from mineral revenue. Exchange gains linked to mineral sources also added to the overall oil-based inflows, pushing the total crude oil contribution to roughly N1.2 trillion, representing two-thirds of the entire FAAC allocation.
While oil revenue soared, non-oil segments underperformed. Value Added Tax, which had contributed significantly in the previous month, declined by more than N64 billion in June.
This drop, along with reduced income from import and excise duties, was attributed to lower trade volumes and sluggish consumer spending, signalling persistent pressure on domestic economic activity.
Despite the weakening in non-oil revenues, the robust performance of the oil sector ensured that FAAC distributions rose substantially in June.
The outcome highlights Nigeria’s enduring dependence on crude oil for budgetary stability and intergovernmental transfers, even as economic diversification efforts continue to face structural and market-related headwinds.
SOURCE: nigerianobservernews.com
