The implementation of Nigeria’s 2023 budget, set at N21.8 trillion, is at risk due to a shortfall in crude oil output, amounting to 470,000 barrels per day in August 2023. This is a significant 29 percent drop from the budget benchmark of 1.69 million barrels per day.
At the current global market price of $92 per barrel, this shortfall equates to a daily loss of $43.2 million or N32 billion, based on the Central Bank of Nigeria’s exchange rate of N742.10/$. The budget had been based on 1.69 million bpd at $75 per barrel.
The cause of this shortfall is attributed largely to crude oil theft. The Nigerian Upstream Petroleum Regulatory Commission noted that the nation also fell short of its condensate output target.
Experts emphasize the need for concerted efforts to address oil theft and production challenges. They also suggest diversifying revenue sources to reduce dependence on crude oil. Additionally, measures should be taken to protect oil assets and engage local communities in the process.