The Nigerian Upstream and Downstream Regulatory Commission (NUPRC) has said that higher federal allocations to oil-producing communities in Nigeria have reduced the rate of bombings of oil facilities in the country. The Commission revealed the development in a statement on X while celebrating the 2026 World Environment Day.
According to the statement, the move was part of efforts by the Federal Government to ensure an environment where oil exploration can thrive. “Did you know that as part of efforts to ensure an environment-friendly regime and optimize Nigeria’s resources, gas terms and gas utilization strategies are now mandatory components of every Field Development Plan (FDP)?
“Furthermore, thanks to the Host Community Development Trust, oil producing communities are getting a bigger piece of the national cake thereby reducing the frequency of attacks on oil facilities and reducing oil spills. “In all, protecting the environment while promoting sustainable value creation from Nigeria’s Petroleum Resources for shared prosperity remains our key focus”, NUPRC noted.
Billions of Naira are shared monthly through the Federation Account Allocation Committee (FAAC). Allocations for oil-producing communities in Nigeria are primarily structured through two systems: the 13% Derivation Fund allocated to state governments and the Host Communities Development Trusts (HCDTs), which receive 3% of oil companies’ actual annual operating expenditures under the Petroleum Industry Act (PIA).
Oil communities such as Abia, Akwa Ibom, Anambra, Bayelsa, Delta, Edo, Imo, Ondo, and Rivers benefit from the funds. However, host communities frequently agitate against state governors, demanding that a dedicated percentage of this 13% derivation fund be remitted directly to the grassroots for local development.
Now, under the Petroleum Industry Act (PIA), a new direct funding mechanism was introduced to directly benefit the communities hosting oil operations, which is 3% of the actual annual operating expenditure (OPEX) of upstream petroleum companies operating in the area.
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