Nigeria loses N636bn in oil revenue as production declines

Onwubuke Melvin
Onwubuke Melvin

Nigeria’s monthly oil outputs have been consistently low since January 2024, resulting in a revenue loss of almost N636.3 billion.

According to data from a Federal Government agency, Nigeria produced 1.43 million barrels of crude oil (excluding condensates) in January of this year, however, this figure dropped to 1.25 million barrels per day in May.

Nigerian Upstream Petroleum Regulatory Commission data showed that while the total volume of crude produced in January was 44.22 million barrels, it dropped to 38.8 million barrels in May, according to The Punch.

This figure shows that crude oil production fell by 5.43 million barrels between January and May of this year.

Brent, the worldwide benchmark for crude oil, averaged $80.12/barrel in January. It increased a little to $81.75 in May, according to figures from Statistica, an international statistical organization.

Furthermore, the naira’s average exchange rate against the US dollar in May this year was N1,434.1/$. The naira has been struggling since January of this year, with its value continuously falling against the dollar.

Based on the 5.43 million barrels crude oil production plunge, the price of Brent, and the exchange rate of the naira in May, Nigeria lost an estimated revenue of about N636.3bn between January and May this year.

Meanwhile, while Nigeria produced 1.43mbpd of crude oil in January, this fell to 1.32mbpd in February, plunged to 1.23mbpd in March, rebounded slightly to 1.28mbpd in April, and then fell to 1.25mbpd in May.

The continued decline in Nigerian oil production has been blamed on pipeline vandalism and crude oil theft. Efforts to end this have been continuing, but have not yet yielded the desired results.

On June 13, 2024, for instance, the Nigerian National Petroleum Company Limited called on the judiciary to form a special court to trial perpetrators of oil theft and pipeline sabotage.

The Group Chief Executive Officer of NNPCL, Mele Kyari made this request at the National Judicial Institute and INVESTIN 234’s National Judges Capacity Building Workshop on the Petroleum Industry Act 2021, held in Abuja.

Kyari urged the judiciary to expedite hearings on crude oil theft and pipeline destruction charges, according to a statement made by NNPC spokeswoman Olufemi Soneye at the time.

Kyari had said, “The gains of the PIA have been severely undermined by crude oil theft and pipeline vandalism and urged the judiciary to consider the creation of a special court to try offences related to crude oil theft and pipeline vandalism or granting accelerated hearings to such cases.”

He noted that the judiciary’s role was vital to the effectiveness of the numerous security arrangements implemented by the NNPC, law enforcement agencies, and other industry stakeholders.

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