Nigeria’s Earnings From Crude Fall 43% Despite Higher Output
Nigeria’s gross profit from crude oil and gas sales fell by N824.66 billion in 2024 despite an increase in production, according to a new report from the Budget Office of the Federation.
Figures in the fourth-quarter Budget Implementation Report show gross profit dropped to N1.08 trillion in 2024, down from N1.90 trillion the previous year — a decline of 43.3%. The performance was also 26.3% below the government’s target of N1.46 trillion, underscoring continued weak fiscal inflows from oil despite recent reforms.
Total oil and gas revenue before deductions stood at N15.07 trillion, missing the N19.99 trillion target by N4.93 trillion, or 24.7%.
Compared with 2023, however, inflows rose sharply from N8.36 trillion, an 80% increase driven largely by higher royalties, penalties and exchange-rate gains following the naira’s depreciation.
Oil receipts rose from N3.35 trillion in the first quarter to N3.91 trillion in the fourth but remained below the projected quarterly average of N4.99 trillion. Officials said the shortfall reflected lower-than-assumed oil prices and production.
Oil output fluctuated between 1.4 million and 1.6 million barrels per day, short of the budget benchmark of 1.78 million barrels per day.
Gross profit from crude and gas sales accounted for only about 8% of total oil and gas revenue, highlighting a shift toward taxes and royalties as the dominant contributors. Petroleum Profit Tax and Company Income Tax brought in N6 trillion, while royalties generated N6.99 trillion — nearly triple the previous year, aided by improved compliance and changes under the Petroleum Industry Act.
Gas-flaring penalties rose to N391.26 billion, up 178% from 2023. Incidental revenue from royalty recovery and marginal-field settlements also more than doubled, while pipeline-fee income increased to N35.2 billion.
One of the largest boosts came from exchange-rate gains, which surged to N4.24 trillion from N791.88 billion in 2023 following currency liberalisation.
After deductions, net oil revenue stood at N12.95 trillion — below the N16.98 trillion target but significantly higher than the N4.82 trillion recorded in 2023.
Oil output improves but misses target
The Nigerian Upstream Petroleum Regulatory Commission reported that crude-oil production rose to 442.21 million barrels in 2024, up 12.6% from 2023. Daily average production increased to 1.43 million barrels per day from 1.27 million barrels.
Production recovered in the second half of the year, reaching 1.49 million barrels per day in December, the highest of 2024. Total liquids — crude and condensates — amounted to 492.34 million barrels, up from 451.09 million barrels in 2023.
Despite the gains, output reached only about 80% of the government’s projection. Analysts attribute the shortfall to ongoing infrastructure constraints, crude theft and underinvestment.
Scrutiny over NNPC remittances
The report comes amid renewed scrutiny of remittances by the Nigerian National Petroleum Company Limited. The World Bank earlier said NNPC was transferring only half of the revenue gains from the removal of petrol subsidies, using the remainder to settle arrears.
Documents from the Federation Account Allocation Committee show that the government has extended an ongoing reconciliation of NNPC payments through December 2024 after unresolved discrepancies. NNPC has been instructed to submit actual remittance figures instead of earlier estimates.
The review follows an investigation commissioned by the Nigeria Governors’ Forum, which alleges significant under-remittances by the company over several years. An ad hoc committee is still examining NNPC’s latest submission.
The state oil company has also not remitted any interim dividends into the Federation Account in 2025, according to FAAC records.
