Nigeria’s Federal Government earned far less than expected from oil in the first half of 2025, posting a shortfall of N16.2 trillion, according to the latest Budget Performance Report from the Budget Office.
Gross oil revenue for January to June stood at N9.32 trillion, well below the N25.52 trillion projected in the mid-year budget. This represents a 63.5 percent gap between projected and actual earnings, highlighting the fragility of Nigeria’s oil-dependent fiscal structure.
Crude production averaged 1.68 million barrels per day (mbpd), slightly above the 1.6 mbpd recorded in the first quarter but still below the budgeted 2.12 mbpd. Compared with the same period in 2024, production improved from 1.41 mbpd, contributing to a 42.6 percent increase in oil revenue year-on-year.
Some revenue streams exceeded projections. Concessional rentals reached N24.82 billion, far surpassing the N2.06 billion target, while miscellaneous oil fees collected N29.73 billion, topping estimates by more than 150 percent.
However, major oil revenue lines underperformed. Crude oil and gas sales brought in just N712.57 billion against a N2.36 trillion target. Petroleum profit and gas taxes fell short by over N11 trillion, and oil and gas royalties reached N3.53 trillion, below the N6.86 trillion estimate.
The report cited challenges such as pipeline vandalism, crude theft, underinvestment in infrastructure, and regulatory uncertainty as ongoing obstacles that affect production and revenue collection. Average crude prices in the second quarter of 2025 stood at $74 per barrel, slightly below the $75 budget benchmark and down 12.7 percent compared with the same quarter of 2024.
Non-oil revenues posted modest gains, supported by inflation and increased economic activity, with second-quarter collections totaling N4.46 trillion, 6.7 percent above estimates. Overall, net revenue available for distribution to federal, state, and local governments was N9.85 trillion, still N7.01 trillion below budgeted expectations.
Finance Minister Wale Edun earlier revealed that total 2025 revenue is expected to fall far short of the projected N40.8 trillion, underscoring ongoing fiscal challenges despite reforms under the Petroleum Industry Act.
The Budget Office emphasized that addressing long-standing production issues, boosting security, increasing domestic refining capacity, and strengthening structural aspects of the oil sector remain crucial to stabilizing revenue and supporting economic recovery.
