Nigeria Records N7.88tn Oil Revenue Shortfall In Third Quarter Of 2025

Nigeria recorded a major oil revenue shortfall in the third quarter of 2025, with earnings falling significantly below government projections despite a slight increase in actual receipts.

According to the latest Fiscal Performance Report released by the Budget Office of the Federation, gross oil revenue for the quarter stood at N4.87 trillion, representing a deficit of N7.88 trillion when compared to the projected quarterly target of N12.76 trillion.

The report showed that oil revenue underperformed by 61.8 per cent, underscoring the continued fiscal challenges facing the country amid rising expenditure demands and debt servicing obligations.

Nigeria’s 2025 fiscal framework projected gross federally collectable revenue of N78.08 trillion, with oil revenue expected to contribute N51.05 trillion, accounting for more than 65 per cent of total projected earnings.

Although actual oil revenue increased slightly from N4.77 trillion recorded in the second quarter of 2025 and N4.62 trillion generated during the corresponding period of 2024, the improvement was insufficient to meet budget expectations.

The Budget Office reported that oil revenue grew by 2.1 per cent on a quarter-on-quarter basis and by 5.41 per cent year-on-year.

A breakdown of revenue components showed widespread underperformance across major oil revenue sources.

Crude oil and gas sales generated N622.99 billion against a projected N1.18 trillion, representing a shortfall of N555.2 billion.

Petroleum Profit Tax and gas taxes yielded N1.97 trillion, far below the projected N7.85 trillion, resulting in a deficit of N5.87 trillion.

Oil and gas royalties generated N2.01 trillion, missing projections by N1.42 trillion, while incidental oil revenue stood at N37 billion compared to the budget estimate of N295.88 billion.

Despite the overall shortfall, some revenue streams exceeded expectations.

Concessional rentals generated N7.89 billion against a projection of N1.03 billion, while miscellaneous oil revenue sources, including pipeline fees, produced N9.65 billion, surpassing budget estimates.

Gas flared penalties and exchange gains also contributed additional revenue during the period.

The report highlighted Nigeria’s continued dependence on oil earnings despite ongoing efforts to strengthen non-oil revenue generation through tax reforms and improved collection systems.

Oil production levels also remained below budget assumptions. While the Federal Government benchmarked crude oil production at 2.1 million barrels per day in the 2025 budget, data from the Nigerian Upstream Petroleum Regulatory Commission showed that the country produced a total of 454.28 million barrels of crude oil and condensate between January and September 2025.

This translated to an average daily production of 1.66 million barrels per day, significantly below the budget benchmark and a key factor behind the revenue shortfall.