Nigeria’s oil revenue fell sharply in the final quarter of 2024, dropping to ₦3.9 trillion.
According to the Budget Office of the Federation (BOF), this figure revealed a major shortfall.
Sharp Drop In Oil Revenue
The revenue missed the quarterly target by ₦1,090.58 billion and fell ₦714.61 billion below Q3.
However, compared with Q4 2023, oil earnings more than doubled, signalling partial recovery from ₦1,886.11 billion.
Mixed Performance Across Revenue Streams
Breaking down the numbers, oil and gas royalties generated ₦2,184.64 billion, exceeding expectations by 36%.
Moreover, concessional rentals and miscellaneous fees, including pipeline charges, also surpassed quarterly projections, reaching ₦5.59 billion and ₦8.79 billion respectively.
Unexpectedly, gas flared penalties contributed ₦108.54 billion, while exchange gains added ₦1,221.49 billion.
Nevertheless, crude oil and gas sales, petroleum profit taxes, and incidental oil revenue underperformed.
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Specifically, crude oil and gas sales fell 8.3% below target at ₦335.69 billion, and petroleum profit taxes missed estimates by 58% at ₦1,249.68 billion.
Similarly, incidental oil revenue, including royalty recovery, dropped 40.7% short of projections to ₦15.57 billion, worsening the shortfall.
Non-Oil Revenue Shines
This decline raises concerns about fiscal stability, as Nigeria still relies heavily on oil proceeds.
Despite these challenges, officials remain hopeful that petroleum reforms and improved Niger Delta security will stabilise revenue.
Meanwhile, non-oil revenue surged to ₦4.387 trillion, 62% above target, driven by taxes and customs.
Company Income Tax (₦1.5 trillion), VAT (₦194 billion), and Customs (₦837.38 billion) outperformed expectations, demonstrating that Nigeria’s diversification is taking effect.
Ultimately, as oil revenues fluctuate, non-oil growth plays an increasingly crucial role in sustaining Nigeria’s budget ambitions.
