Nigeria’s oil sector faced a significant gross oil revenue shortfall of approximately ₦24.47 trillion over the 2024 and 2025 fiscal years, Pinnacle Daily’s analysis has shown.
This gap stems from the disparity between the ambitious revenue projections set in the national budgets of 2024 and 2025 and the actual receipts collected by the federation.
The underperformance has been particularly significant over the last two years as the government set higher benchmarks to fund expanding national budgets.
Data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) revealed stark differences between what was projected and what was realised even when oil prices rallied above the benchmark in the budgets.
2024 Oil Production
NUPRC data on daily average production showed that oil production, including condensate in January 2024 was 1.65 million barrels per day (mbpd); February, 1.54mbpd; March, 1.44mbpd; April, 1.45mbpd; May, 1.48mbpd; June, 1.50mbpd; July, 1.56mbpd; August, 1.58mbpd; September, 1.56mbpd, October, 1.53mbpd; November, 1.69mbpd; and December, 1.68mbpd.
Nigeria’s 2024 budget benchmarked oil production at 1.78mbpd (including condensates) and a crude oil price of $77.96 per barrel. Actual production, as seen in the data, often fell below the target, averaging 1.55mbpd. Going by the budget estimate, the 1.78mbpd target multiplied by 365 days in a year is 649.7 million barrels expected to be produced in 2024. The average actual production of 1.55mbpd multiplied by 365 days in the year is 565.75 million barrels. 649.7 million minus 565.75 million gives 83.95 million barrels as the production shortfall in 2024.
According to data from the Central Bank of Nigeria (CBN), the price of Bonny Light, Nigeria’s flagship crude grade, fluctuated in 2024.
The crude grade sold at an average of $82.18 per barrel in January 2024, rising to $86.08 in February, $88.80 in March, and $93.12 in April. Prices dropped to $84.01 in May and $83.64 in June. It recovered in July and sold for $87.28, but dropped again in August to $82.88. It further declined to $76.05 in September. It sold for $76.69 in October, $75.44 in November and $74.72 in December 2024.
The average for the Bonny Light crude prices across 12 months of 2024, as published by the CBN, is $82.57 per barrel. $82.57 multiplied by 83.96 million barrels gives an estimated revenue loss of $6.96 billion in the 2024 fiscal year.
2025 production
In 2025, the NUPRC data show that Nigeria recorded 1.74mbpd in January, 1.67mbpd in February, 1.60mbpd in March, 1.68mbpd in April, 1.66mbpd in May, 1.69mbpd in June, 1.71mbpd in July, 1.63mbpd in August, 1.58mbpd in September, 1.59mbpd in October, 1.60mbpd in November and 1.54mbpd in December.
The 2025 budget was predicated on an oil production benchmark of 2.06 million barrels per day (including condensates) and a crude oil price benchmark of $75 per barrel. This means the country was expected to produce 751.9 million barrels in 2025, going by the target. However, the actual production stood at an average of 1.64mbpd. 1.64mbpd multiplied by 365 days means about 598.6 million barrels were produced, giving an estimated shortfall of 153.3 million barrels in 2025.
Bonny Light crude sold at an average of $80.76 per barrel in January 2025, dropped to $77.08 in February, and $74.44 in March. It further declined to $69.07 in April and $65.90 in May. It recovered in June, rising to $73.50, but dropped again to $73.18 in July. It sold for $70.55 in August, $70.20 in September, $66.15 in October, and $65.22 in November. The data for December was not available.
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Taking the average price over the 11 months yields a crude price of $71.46 per barrel. $71.46 multiplied by 153.3 million barrels gives an estimated lost revenue of $10.95 billion.
Cumulatively, the country lost an estimated $17.91 billion. At the current exchange rate of ₦1,366 per dollar, this translates to approximately ₦24.47 trillion.
Primary Drivers of the Revenue Gap
Analysts note that the revenue gap as a result of production shortfalls highlights structural challenges in Nigeria’s upstream oil sector, which include security issues in the oil-producing areas, operational disruptions, and infrastructure constraints.
While NUPRC reported that crude oil theft reached a 16-year low in mid-2025 (dropping to 9,600 bpd), systemic issues like aging infrastructure, operational outages, and delayed investment continue to cap production capacity.
Price volatility is also cited as one of the drivers of the revenue gap. Realized crude prices occasionally dipped below budget benchmarks. As observed in the crude price trend in both 2024 and 2025, there were months when prices dropped below the budget estimate, highlighting the deficit.
2026 Outlook and Budgetary Tension
The persistent underperformance has led to friction between the National Assembly and the executive’s economic team regarding the 2026 Budget.
After having a 2.06 million barrels per day projection and $75 per barrel in 2025, the 2026 budget has a 1.84 million bpd, a conservative oil price benchmark of $64.85 per barrel and an average exchange rate of ₦1,400 per dollar, reflecting ongoing uncertainties in global oil markets and domestic production challenges.
However, lawmakers expressed concern that anchoring the ₦58.47 trillion 2026 budget on a target of 1.84mbpd may lead to further deficit spending if the production trend does not sharply reverse.
When oil receipts fall short of targets set by the executive, the government typically prioritises debt servicing and personnel costs, leaving infrastructure projects to bear the brunt of the cuts.
Energy experts have urged the government to prioritise improving security around oil facilities, reducing operational disruptions, enhancing regulatory efficiency and creating a conducive environment for optimal production.
2026 Output
So far, data released for 2026 show that Nigeria is performing below both the budget target and quota given by the Organisation of Petroleum Exporting Countries (OPEC).
In January, the daily average production was 1,627,461 barrels per day, comprising both crude oil (1,459,242 bpd) and condensate (168,218 bpd). This means a shortfall of about 210,000 barrels per day for the 1.84 million bpd budget. For the OPEC quota, the output reflects a shortfall of 40,758 barrels per day.
In February, the latest monthly report released by OPEC shows that Nigeria’s crude oil production fell to 1.31 million bpd from 1.45 million bpd in January. This reflects a 190,000 barrels per day shortfall in meeting the OPEC quota in February.
The February output also shows that Nigeria has missed the OPEC production quota for the seventh consecutive month, eliciting concerns from economic experts about the impact on the country’s public finances and potential implications for the foreign exchange reserves.
Razia Khan, Chief Economist for Africa and the Middle East at Standard Chartered, stated that, while oil production remains the single most important driver of Nigeria’s external liquidity, consistent failure to meet quotas could jeopardize the CBN’s ability to build the country’s reserves.
Bismarck Rewane, the Chief Executive Officer of Financial Derivatives Company Limited, said Nigeria’s failure to meet its OPEC quota, even when it is not subject to production cuts like some other producers, highlights domestic challenges that have long afflicted the industry, which need to be tackled through deliberate and consistent efforts to boost oil production.
“Every barrel Nigeria fails to produce is essentially lost revenue. At current oil prices, even a deficit of forty or fifty thousand barrels per day represents a significant loss of foreign exchange earnings that the economy can ill afford,” Rewane stated.
Victor Ezeja is a passionate journalist, scholar and analyst of socioeconomic issues in Nigeria and Africa. He is skilled in energy reporting, business and economy, and holds a master's degree in Mass Communication. He can be reached via @VICTOREZEJA on X
