Chairman of the Alliance for Economic Research and Ethics (AERE), Dele Oye, has raised concerns that Nigeria is having a shortfall of 360,000 barrels daily and losing at least ₦28.3 trillion annually in additional revenue as oil prices have surged above $100 per barrel due to the ongoing war involving the United States, Israel, and Iran.
Oye, who is the immediate past chairman of the Organised Private Sector of Nigeria (OPSN), said the oil shortfall and revenue losses are due to low production.
In a statement released on Sunday, Oye said while many oil-rich countries exploited the opportunity of the windfall to earn additional revenue, Nigeria, regarded as the giant of Africa, got little to nothing.
AERE chairman noted that with oil prices soaring above $100 per barrel, Nigeria should be earning between $37 and $49 per barrel as a premium, but low production, coupled with crude-backed loans, has denied the country that opportunity.
“When the Iran war sent oil prices soaring past $100 per barrel, many nations rushed to harvest the windfall. But Nigeria, the giant of Africa, found itself like the proverbial goat standing in front of palm leaves yet chewing stones. The paradox is painful: oil is expensive, but our pockets remain empty,” Oye stated.
“On paper, Nigeria should be smiling to the bank. Brent crude now trades at $102–$114 per barrel, far above our budget benchmark of $64.85. That’s a premium of $37–$49 per barrel, translating to a theoretical ₦28.3 trillion annual windfall. But reality bites harder than arithmetic.”
He said the country is producing only 1.46 million barrels per day instead of the 1.84 million barrels per day target in the budget, leading to a production shortfall of 360,000 barrels daily.
He recalled that during the peak of the Russia-Ukraine war, when oil hit $110 for six months, Nigeria captured only a little chunk of the revenue due to low production and heavy spending on fuel subsidy then.
He described the NNPC’s pledge to add 100,000 barrels as a “drop in the ocean” compared to the 360,000 bpd shortfall.
According to him, if Nigeria could capture even a fraction of the oil windfall, it is enough to fund the establishment of a strategic petroleum reserves -which the country currently do not have- finance fertilizer subsidies for farmers as planting season approaches, help in expanding deployment and access to use of CNG to reduce petrol dependence and facilitate targeted social intervention programme cushion the costs of things for vulnerable households.
Refinery rehabilitation and modular refinery investments.
On the ongoing discussions about rehabilitating the state-owned refineries, Oye said the country should first deal with fixing oil production challenges before that.
He urged the government to shun the temptation of resorting to “quick fixes” and instead build the foundation for resilience and address issues limiting the allocation of crude to local refineries.
He noted that if there were strategic reserves, mobilizing products from there could help to stabilize supply.
He called on the government to secure oil assets to increase production and close the 360,000bpd production gap.
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He further urged the government to fast-track distribution of fertilizers to farmers before planting season to boost agricultural activities, introduce affordable, flexible fuel taxes, and scale up CNG adoption and LPG household conversion.
“Ring-fence windfalls into the Sovereign Wealth Fund and Excess Crude Account.
“States should subsidize public transport, not fuel. Let households cook with LPG, not petrol.
“Above all, avoid the subsidy trap and resist adjusting budgets to assume $100 oil is permanent. As the elders say, “The rain does not fall forever; the sun must shine again.”
He added, “Nigeria stands at a crossroads. The Iran war has opened a window of opportunity, but without production discipline, we risk watching billions slip through our fingers. Oil booms are fleeting.
“The real test is whether Nigeria can finally build an economy that thrives not because oil is expensive, but because its foundations are strong enough to withstand both boom and gloom. As one editorial wisely put it: ‘A nation that eats its seed yams during planting season will starve at harvest.’ Nigeria must choose wisely.”
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
