Nigeria’s oil revenue has declined by 43% despite a rebound in oil production, according to the latest Budget Implementation Report for the fourth quarter of 2024. Gross profit from crude and gas sales fell to 1.08 trillion naira, down from 1.90 trillion in 2023, representing a 43.32% drop. This decrease highlights a shift toward taxes and royalties as the dominant contributors to the country’s oil and gas revenue.
The total oil and gas revenue before deductions stood at 15.07 trillion naira in 2024, falling short of the budgeted 19.99 trillion by 4.93 trillion (24.65%). The shortfall in oil revenue was partly offset by an increase in taxes and royalties: Petroleum Profit Tax and Company Income Tax generated 6 trillion naira, while royalties rose to 6.99 trillion, nearly triple the previous year’s figure.
The Nigerian Upstream Petroleum Regulatory Commission reported a 12.6% increase in crude oil production, with 442.21 million barrels produced in 2024, up from 2023. However, production reached only about 80% of the government’s projection due to ongoing infrastructure constraints, crude theft, and underinvestment.
The rise in oil revenue was driven largely by stronger receipts from royalties, penalties, and exchange‑rate gains rather than higher crude export volumes. Exchange‑rate gains surged to 4.24 trillion naira in 2024, up from 791.88 billion in 2023, following the naira’s steep depreciation after exchange‑rate liberalisation.
After accounting for all deductions, net oil revenue for 2024 stood at 12.95 trillion naira, against a budget target of 16.98 trillion—a shortfall of 4.03 trillion (23.74%). Nonetheless, this figure represents a 168.83% increase from the 4.82 trillion realised in 2023. Significant growth was also driven by incidental oil revenue from royalty recovery and marginal‑field settlements, which climbed to 347.75 billion from 155.99 billion (a 122.93% rise). Gas‑flaring penalties rose to 391.26 billion, up 178% from 2023, while pipeline‑fee income increased to 35.2 billion.
The increase in oil revenue is a positive development for Nigeria’s economy, but the country still faces challenges in meeting production targets and addressing infrastructure constraints and crude theft. The government will need to continue working on these issues to ensure sustained growth in the oil and gas sector.
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