Nigeria’s crude oil and gas profits dropped sharply by 43 per cent in 2024, falling to ₦1.08 trillion from ₦1.9 trillion in 2023, according to the Budget Office of the Federation’s fourth-quarter Budget Implementation Report. The slump came despite a modest recovery in oil production, underscoring persistent challenges in the country’s petroleum revenue performance. The report also showed that actual oil and gas inflows, at ₦15.07 trillion, fell 25 per cent below the government’s ₦19.99 trillion target, revealing weak fiscal inflows despite reforms.
Analysts say much of the apparent revenue growth in 2024 was driven not by improved crude exports but by exchange-rate gains following the naira unification policy, which inflated dollar-denominated receipts when converted to local currency. While oil and gas royalties rose to ₦6.99 trillion—a 179 per cent jump from the previous year—gross profit from crude sales contributed just eight per cent of total oil revenue. This shift highlights Nigeria’s growing dependence on taxes, royalties, and penalties rather than direct crude proceeds.
Production data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) showed a 12.6 per cent rise in crude output to 442.21 million barrels in 2024, up from 392.66 million barrels in 2023. Daily average production increased to 1.43 million barrels per day, below the budget target of 1.78 million. Despite improved field operations and reduced pipeline vandalism, Nigeria’s production achieved only about 80 per cent of its fiscal projection, resulting in lower-than-expected inflows.
Experts attribute the decline in crude earnings to opaque oil-for-loan deals, underreported domestic transactions, and unremitted funds by the Nigerian National Petroleum Company Limited (NNPCL). They argue that a significant portion of Nigeria’s oil barrels are already committed to debt repayments and forward-sale contracts, which reduces the actual volume generating fresh revenue. Reports from the World Bank and Federation Account Allocation Committee (FAAC) have raised concerns over NNPCL’s partial remittances and unresolved discrepancies in its accounts.
Energy analysts including Prof. Dayo Ayoade, Mr. Ademola Adigun, and Dr. Muda Yusuf have called for greater transparency, accurate production data, and disclosure of oil-swap and forward-sale agreements. They warn that Nigeria’s continued opacity in crude trading could threaten fiscal stability and investor confidence. With global energy transition gathering pace, experts urge the government to strengthen reforms under the Petroleum Industry Act, enhance local refining capacity, and ensure that oil earnings genuinely reflect national production.
source: punch