Nigeria’s Oil Revenue Falls 22% to N3.9trn in Q4 2024

Also Read

Nigeria’s oil revenue fell by 21.82 percent to N3.9 trillion in the fourth quarter of 2024, highlighting a significant shortfall from budgetary projections and underscoring ongoing fiscal pressure on the federal government.

This was contained in the Q4 2024 Budget Implementation Report released by the Budget Office of the Federation (BOF).

According to the report, the country earned N3,908.50 billion in gross oil revenue, falling short of the prorated quarterly estimate by N1,090.58 billion (21.82%). The figure also represented a 15.46 percent decline from the N4,623.12 billion recorded in the third quarter of 2024.

However, when compared to the N1,886.11 billion generated in the corresponding quarter of 2023, the report noted a 107.23 percent increase, reflecting improved oil production and price conditions over the year.

Breakdown of Oil Revenue Components

The Budget Office provided a detailed breakdown of oil revenue performance across various categories for the period under review.

Royalties (Oil & Gas): N2,184.64 billion — exceeding the quarterly estimate of N1,605.90 billion by N578.73 billion (36.04%).
Concessional Rentals: N5.59 billion — surpassing the target of N2.18 billion by N3.41 billion (156.15%).
Miscellaneous Revenue: N8.79 billion — exceeding the projection of N4.02 billion by N4.77 billion (118.48%).
Gas Flared Penalty and Exchange Gain: yielded N108.54 billion and N1,221.49 billion respectively, both of which had no budgetary projection for the quarter.

Despite the overall gains in certain components, some key revenue lines underperformed significantly:

Crude Oil and Gas Sales: N335.69 billion, below the quarterly estimate of N366.09 billion by N30.40 billion (8.3%).
Petroleum Profit and Gas Taxes: N1,249.68 billion, underperforming by N1,744.95 billion (58.27%) against the target of N2,994.62 billion.
Incidental Oil Revenue (Royalty Recovery & Marginal Field): N15.57 billion, falling short by N10.69 billion (40.7%) from the N26.25 billion estimate.

Fiscal Implications and Government Outlook

The Budget Office noted that the shortfall in oil revenue poses renewed concerns for Nigeria’s fiscal stability, especially as the federal government remains heavily reliant on oil receipts to fund its expenditure plans.

However, it expressed optimism that ongoing petroleum sector reforms — including the implementation of the Petroleum Industry Act (PIA), improved security in the Niger Delta, and enhanced oversight of crude production and sales — will stabilise oil revenues in subsequent quarters.

Non-Oil Revenue Outperforms Expectations

While oil revenue faltered, non-oil revenue posted a strong performance during the period, rising to N4.387.93 trillion, an increase of N1.68 trillion (62.39%) above the quarterly estimate of N2.70 trillion.

This growth was driven by robust collections from:

Company Income Tax (CIT): N1.5 trillion (+79.79%)
Value Added Tax (VAT): N1.94 trillion (+96.94%)
Customs Collections: N837.38 billion (+16.75%)

The surge in non-oil receipts helped partially offset the oil sector’s decline, reflecting the government’s gradual progress toward diversifying revenue sources beyond crude exports.

Summary

Nigeria’s Q4 2024 fiscal report paints a mixed picture: while non-oil income strengthened impressively, oil revenues — the backbone of government financing — weakened sharply against targets. Analysts say sustained reforms, production stability, and efficient tax collection will be critical to achieving fiscal balance in 2025.