The Federal Government may lose N3.89 trillion from its projected revenue in this year’s budget as a result of the country’s inability to meet its crude oil production target of 1.78 million barrels per day.
This was revealed by the draft Accelerated Stabilisation and Advancement Plan (ASAP) seen by New Telegraph yesterday The report noted that the Federal Government targeted to generate N19.68 trillion from diverse revenue sources.
According to the report, the sub-optimal crude oil production could reduce the projected earnings to around N15.78 trillion, creating the projected shortfall. It added that there was an average 27 per cent shortfall in crude oil production from the target set in the 2024 budget and that this put the estimated revenue for the year at risk.
The Federal Government targets to raise N6.23 trillion in oil revenue, using the adjusted calculation from January and February data. Its revenue projection in the 2024 budget is about N19.6 trillion and a deficit of N9.18 trillion. Nigeria has been unable to meet the average daily crude oil production projection of 1.78 million barrels per day from January to April 2024.
The nation’s quota of 1.5 million barrels per day by the Organisation of Petroleum Exporting Countries and its allies (OPEC+) in December 2023 threatened the nation’s target of 1.78 million barrels per day by a shortfall of 288,000 per day. Nigeria’s oil production in January 2024 was 1.380mbpd, a total of 42 million barrels; February 1.322 mbpd;
The country’s output decreased to 1.322 mbpd)in February and further to 1.231mbpd in March using OPEC crude oil production based on direct communication. However, in April, Nigeria’s oil production increased to 1.281mbpd, showing an increase of 51,000 barrels per day.
Nigeria failed each of the four months to meet its 1.78million production target and even the OPEC quota. The report said: “Revenue for January & February 2024 was approximately 60.0 per cent of budget, largely driven by lower crude oil production volumes (running at 74.5% of budget projection).
If current revenue shortfalls persist, the revenue for 2024 is unlikely to exceed N15.8 trillion.” “Our ability to achieve the 2024 Budgeted revenue step-up of 77.4 per cent from 2023 actual is at risk should oil production remain at 27.0 per cent below budget. Fifty per cent of the annualised YTD variance suggests a lower-than-budgeted revenue of N15.7 trillion at the current run rate.”
