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By subjecting the price of premium motor spirit to the vagaries of international market, the 36 states of the federation and the 774 local governments stand to gain an increase of about N239.1 billion annually in their statutory allocations based on current oil price and Federation Accounts Allocation Committee (FAAC) formula. From the latest subsidy figures, every litre of PMS sold at N65 enjoys a subsidy that adds up to N45 billion a month, amounting to N530 billion annually. Under the current revenue sharing formula among the three tiers of government, N239.1 billion of the money saved from subsidy will be allocated to states and local governments. With this calculation will be getting N3 billion, but the benefits may not be equal due to elements of derivation and other adjustments by FAAC. Deregulation and the effects on their share of revenue is one issue that the states had no say on before now. In 1973 fixing of petroleum prices was introduced by the military regime of Yakubu Gowon. Even after democratic rule came into being in 1979, states still had no say over subsidies. The calculated benefits confirm the viewpoint that deregulation has the potential to spur economic activities that will benefit the economy in the longer term. Oil marketers agree that freeing the money spent on subsidy will enable the Federal Government to fix the poor state of infrastructure across the states and with these there would be increased economic activities. “If the infrastructure is put in proper order, the tempo of economic activities of the states would pick”, says Femi Olawore, secretary- general of the Major Oil Marketers Association of Nigeria (MOMAN). Supporting this view, Tunde Falashinu, managing director of African Petroleum plc, said with increased business activities on the side of the companies, their income base will improve and they would be able to contribute their quota more appropriately to the states where they are operating through taxes and corporate social responsibility. For local governments, up to N100 million a year will accrue to them as additional revenue. This will go a long way towards meeting the payment of teacher’s salaries. An official of National Union of Petroleum and Natural Gas workers (NUPENG), Nojeem Korode, said revenue allocation to states would increase with attendant boost in employment generation. He however remarked that the present opposition to deregulation by labour stems from the fact that they doubt government’s transparency.