Details on the MTEF document released by the Budget office of the country has shown that only 39.4% of the country’s Oil revenue target was met between January to April, 2022.
According to the document, the country targeted a sum of N3.123 trillion Oil revenue in the period but could only record N1.231 trillion gross revenue.
Of this amount, a total of N348 billion was recorded as deductions, leaving the Net revenue at N883 billion. This is N629.49 billion short of the estimated N1.512billion net revenue target by the government.
The inability to meet targets is not helped by the persistently low oil production of the country. In 2021 for instance, the country could not meet its daily oil target by an average of 400,000 barrels per day.
In the first quarter of 2022, only an average of 1.32 million barrels of Crude Oil was produced daily, down from the 1.48 million barrels produced daily in 2021,
The country’s oil corporation, the NNPC, newly rebranded as a limited liability company for the purpose of making profits, failed to remit any money to the federation account as a result of petroleum subsidies and ‘increasing daily petroleum consumption’.
The country spent a sum of N947.53 billion between January and April, 2022 on subsidy payments. Between February to December, 2021, the country spent N1.43 trillion on subsidies but if the current trend continues the country might spend N2.6 trillion on subsidy in 11 months, an 85.7% increase over what it spent in a similar period in 2021.
In January 2022, subsidies gulped a sum of N210.38 billion, February N219.78 billion, March N245.77 billion and April N271.59 billion.
Despite an increase in crude prices, the absence of working refineries in the country leaves the country at the mercy of the international market for the importation of refined petroleum with hard to come by fx. Combined with heavy subsidy payments, the ability to contribute to government revenues in any significant manner is gravely impacted.
Already, Nigeria has been warned about its dwindling revenue with persistently low revenues from its oil sector, subsidy payments and the impact it could have on fiscal policies.