Nigeria’s oil revenue performance fell sharply below budget expectations in the third quarter of 2025, highlighting the country’s persistent fiscal vulnerability despite slight improvements in actual oil earnings.

According to the latest fiscal performance report by the Budget Office of the Federation, gross oil revenue for the quarter amounted to N4.87 trillion, reflecting a shortfall of N7.88 trillion or 61.8 per cent below the projected target.

The revenue figure was significantly lower than the prorated quarterly gross oil revenue benchmark of N12.76 trillion outlined in the 2025 budget framework.

The weak performance comes amid mounting debt service obligations, persistent fiscal deficits and ongoing efforts by the Federal Government to boost non-oil revenue through tax reforms and improved revenue collection.

The Budget Office stated that the 2025 fiscal framework projected gross federally collectable revenue of N78.08 trillion, with oil revenue expected to account for N51.05 trillion, representing 65.38 per cent of the total projected revenue.

Based on the fiscal framework, prorated quarterly revenue expectations for 2025 were estimated at about N19.52 trillion.

However, gross oil revenue generated in the third quarter of 2025 stood at N4.87 trillion, representing a shortfall of N7.88 trillion from the quarterly projection.

Despite the gap, oil revenue recorded a slight improvement from the N4.77 trillion posted in Q2 2025 and the N4.62 trillion generated in the corresponding period of 2024.

The Budget Office stated that actual oil revenue rose by 2.1 per cent quarter-on-quarter and 5.41 per cent year-on-year, indicating modest gains in oil receipts despite continued underperformance against fiscal targets.

A breakdown of the oil revenue components showed that several major revenue streams posted significant shortfalls against budget targets during the quarter.

Crude oil and gas sales generated N622.99 billion, falling short of the projected N1.18 trillion by N555.2 billion, representing a 47.12 per cent deficit.

Petroleum Profit Tax and gas taxes recorded N1.97 trillion against a projected N7.85 trillion, resulting in a shortfall of N5.87 trillion or 74.82 per cent below target.

Oil and gas royalties stood at N2.01 trillion, missing the quarterly estimate of N3.43 trillion by N1.42 trillion.

However, some oil-related revenue streams outperformed budget expectations during the quarter.

Concessional rentals generated N7.89 billion against a projected N1.03 billion, exceeding estimates by 667.5 per cent.

Miscellaneous oil revenue items, including pipeline fees, generated N9.65 billion compared to the projected N5.86 billion.

Gas flared penalties and exchange gain revenues also contributed N181.61 billion and N28.65 billion respectively, despite having no budget projections for the period.

Nigeria has consistently fallen short of its OPEC production quota for several months since 2025.

The Federal Government set a crude oil production benchmark of 2.1 million barrels per day in the 2025 budget, but actual output has remained below expectations.

Data from the Nigerian Upstream Petroleum Regulatory Commission showed that total crude oil and condensate production between January and September 2025 stood at 454.28 million barrels.