Oil Production Shortfalls Cost Nigeria $6.8bn in Eight Months
Nigeria has recorded crude oil production shortfall of about 93.74 million barrels in the first eight months of 2025, raising concerns over adequate funding of the 2025 national budget.
The shortfall indicates about $6.848 shortfall in oil revenue, the key component of budgetary funding.
The price of Nigeria’s bonny light crude oil averaged $73.06 per barrel, according to data obtained from the Central Bank of Nigeria (CBN).
But the revenue shortfall attributable to production shortfall would be $7.03 billion when calculated with the 2025 budget benchmark of $75 per barrel.
Data obtained from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) revealed that total crude oil and condensate output between January and August stood at 406.84 million barrels, representing a 18.27 percent deficit against the 500.58 million barrels projected in the budget for the period.
The 2025 budget was predicated on a daily crude oil production target of 2.06 million barrels, but NUPRC data showed actual output averaged 1.673 million barrels per day during the eight-month period, indicating an average shortfall of 390,000 barrels per day.
If the trend continues in the remaining four months of the year, the country would lose 47.58 million barrels in 122 days and about $3.56 billion in revenue.
The breakdown of the NUPRC data shows that the country missed its production target by 35.01 million barrels in the first quarter, Q1’25, amounting to a market value of $2.625 billion.
The shortfalls continued in the second quarter, Q2’25, with a total of 34.67 million barrels production losses valued at $2.592 billion.
The third quarter is also trending in the same direction as July data show, 10.78 million barrels ($808.5 million) and in August, 13.28 million barrels ($996 million) losses.
The Commission, in its August 2025 report to the September Federation Account Allocation Committee (FAAC) meeting, showed a revenue shortfall of N459.6 billion against its August 2025 budgetary target of N1.2 trillion, after remitting only N745 billion. The revenue remittance for July was N723.168 billion.
In these two months alone, the government recorded a combined revenue shortfall of N941.229 billion from the oil and gas sector.
“Total collection increased by N22.04 billion, equivalent to 3.05 percent when compared with July 2025. The increase in collection for the month of August 2025 can be attributed to a revenue drive that led to improvement in almost all the revenue heads,” the report noted.
But a breakdown, however, showed that the underperformance was driven largely by poor royalty inflows from oil and gas. While the monthly budget projected N1.144 trillion from royalties, only N682.28 billion was realised in August, leaving a gap of N461.89 billion.
So far, NUPRC said it has transferred N5.475 trillion through the Central Bank of Nigeria to the Federation Account between January and August 2025, instead of N8.433 trillion expected from the sector.
It added: “The Commission’s performance from January to August 2025 is N7.103 trillion, inclusive of NNPC Limited JV and PSC royalty receivables of N1.050 trillion for the period, as well as Project Gazelle receipts of N730.24 billion for November 2024 (received in January 2025), and from January, March to June 2025.”
SOURCE: Vanguard