-
Budget Office confirms 22% decline in Q4 2024, totalling ₦3.9 trillion
-
Key petroleum taxes underperform, raising fears of widening budget deficit
-
Reforms under Petroleum Industry Act (PIA) expected to stabilise future inflows
Nigeria’s oil revenue slumped by 22 percent to ₦3.9 trillion in the fourth quarter of 2024, reflecting a sharp deviation from budgetary expectations, according to the Budget Office of the Federation (BOF).
In its Q4 2024 Budget Implementation Report, the Budget Office disclosed that gross oil earnings amounted to ₦3.908 trillion, representing a shortfall of ₦1.09 trillion (21.82%) compared to the projected quarterly target.
The performance also fell below the ₦4.62 trillion recorded in the third quarter of 2024 by ₦714.61 billion (15.46%), though it showed improvement from the ₦1.88 trillion generated in the corresponding period of 2023.
Breakdown of Components
The report showed mixed outcomes across various oil revenue sources.
Royalties from Oil and Gas generated ₦2.18 trillion, exceeding estimates by ₦578.73 billion (36%), while Concessional Rentals and Miscellaneous Revenues also outperformed their projections.
READ ALSO: Aliko Dangote’s Net Worth Hits $30.2 Billion as Cement and Oil Businesses Surge
However, critical revenue lines underperformed.
“Crude Oil and Gas Sales of ₦335.69 billion, Petroleum Profit and Gas Taxes of ₦1.25 trillion, and Incidental Oil Revenue of ₦15.57 billion fell below their quarterly estimates by 8.3%, 58.27%, and 40.7%, respectively,” the Budget Office stated.
Fiscal Implications
The 22% drop raises fresh concerns over fiscal stability, given the Federal Government’s heavy dependence on oil to finance key obligations.
Despite the setback, officials remain optimistic that recent reforms — including the Petroleum Industry Act (PIA), enhanced security in the Niger Delta, and stricter oversight on oil production — will help stabilise revenues in coming quarters.
In contrast, non-oil revenue rose significantly to ₦4.39 trillion, outperforming projections by 62.39%, driven largely by higher Company Income Tax (CIT), Value Added Tax (VAT), and Customs duties.
