The fiscal numbers coming out of Nigeria’s Federation Budget Office are stark. Across the first three quarters of fiscal year 2025, oil and gas tax revenues fell short of their 17.4 trillion naira ($9.1 billion) target by a margin that is not a rounding error — it is a structural indictment of a sector in prolonged distress.
The most damaging shortfall was in petroleum profit tax and gas levies: the government collected just 6.14 trillion naira ($3.2 billion) against a target of 23.54 trillion naira ($12.3 billion). That single line item alone represents a revenue gap of more than $9 billion in nine months — equivalent to roughly the entire annual budget of several Nigerian federal ministries combined.
The pain extended uniformly across every petroleum revenue category. Crude oil and gas sales generated 1.33 trillion naira ($697 million), against a projected 3.53 trillion naira ($1.85 billion). Oil and gas royalties came in at 5.54 trillion naira ($2.9 billion), against a 10.3 trillion naira ($5.4 billion) target. Ancillary petroleum revenues reached only 475.9 billion naira ($249 million) against an expected 887.65 billion naira ($465 million). The Budget Office cited below-forecast crude production, lower-than-expected international oil prices, operational disruptions, infrastructure failures, underinvestment in exploration and production, and persistent crude oil theft as the compounding factors behind the collective shortfall.
The pattern is not new — it is the acceleration of a slide that has been underway for years. In 2023, Nigeria collected only $30.85 billion in oil revenues, down 13.7 percent from $35.77 billion in 2022, according to the Nigeria Extractive Industries Transparency Initiative (NEITI). Full-year 2024 revenues missed their target by 24.7 percent, coming in at 15.07 trillion naira ($7.9 billion) against a projected 19.99 trillion naira ($10.5 billion). Production did improve over 2024, reaching 1.49 million barrels per day in December, but lower global prices and theft-related production losses ate into the revenue yield from every barrel that actually made it to export.
In February 2026, the federal government introduced a revenue centralisation policy aimed at tightening the financial flows between NNPC Limited and the public treasury — an administrative reform designed to ensure that oil revenues are fully remitted and accounted for. The effects of that measure have not yet appeared in the data.
The World Bank’s Nigeria Economic Update, published in April 2025, had already warned that falling oil prices would weigh on Nigerian growth through 2025 and 2026 with a direct impact on the government’s ability to fund priority infrastructure and social spending. The fiscal data is tracking that forecast with uncomfortable precision. With oil revenues accounting for the dominant share of federal government income, Nigeria’s fiscal room for error is narrowing at precisely the moment it needs to invest most heavily in the sector’s turnaround.
Source: orientalnewsng.com