Nigeria’s oil sector continues to underperform, putting pressure on the country’s overall revenue growth, even as non-oil tax agencies exceed expectations. Latest data shows that the Federal Inland Revenue Service (FIRS) alone helped push government revenue to N31.38 trillion in the first nine months of 2025, highlighting a sharp contrast between oil and non-oil contributions.
According to Agora Policy data tracking the Federation Account Allocation Committee (FAAC) inflows, only three of Nigeria’s five key revenue-generating agencies met or exceeded their targets. FIRS, the Nigerian Customs Service (NCS), and the Ministry of Solid Minerals Development (MSMD) recorded strong performance, offsetting shortfalls from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and Nigerian National Petroleum Company Limited (NNPCL).
FIRS outperformed its N17.47 trillion budget with actual remittances of N21.21 trillion, a 21% increase above projections. Similarly, the Customs Service delivered N3.04 trillion, slightly above its target of N2.89 trillion, while the MSMD doubled its modest target to contribute N0.06 trillion. In stark contrast, NUPRC fell short by 43% with N6.22 trillion against a N10.84 trillion target, and NNPCL’s contribution plummeted 83% below expectations, remitting only N0.53 trillion of a planned N3.15 trillion.
The persistent underperformance of oil-linked revenues reflects Nigeria’s inability to sustain daily oil production above 1.5 million barrels per day (bpd), far below the 2 million bpd benchmark set in the 2025 budget. Monthly production data reveal consistent shortfalls, with January output missing 500,000 bpd and February slipping further to 1.4 million bpd. Even in months with slight improvements, the country lost billions in potential revenue due to unmet production targets.
Despite the challenges, NNPCL reported total remittances of N10 trillion between January and August 2025. However, the company’s September report revealed that nearly 95% of its revenue was absorbed by operating expenses, with profits dropping sharply in mid-year months despite high revenue levels. This underscores the heavy cost burden within Nigeria’s petroleum sector and the urgent need for reforms to boost oil production and profitability.
source: The guardian