Nigeria’s oil revenue soars by N450bn in two months

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Nigeria’s crude oil earnings have seen a significant increase, according to the Federal Government (FG). An analysis of recent oil production data suggests a jump of approximately N449.93 billion between December 2023 and January 2024. This growth is attributed to both a rise in oil production volume and higher global crude oil prices.

The report cites data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) indicating an increase in crude oil production (excluding condensates) from November 2023. This production hike, coupled with a rise in the average price of benchmark Brent crude in December, translated into additional revenue for the government.

The exact breakdown of the N450 billion increase is not yet available, but the report suggests it stems from a combination of December’s earnings of around N244.79 billion and January’s at approximately N205.14 billion. Both figures are based on official exchange rates for those months.

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Data from the Country Economy, a global economic and statistical firm, put the average cost of Brent, the benchmark for crude oil, at $77.63/barrel in December 2023.

Therefore by increasing production by 3.88 million barrels and multiplied by $77.63/barrel, the country earned an additional $301.2m in December, representing N244.79bn at the official average exchange rate of N812.7/$ in December 2023.

The production of crude by oil firms in Nigeria increased in January 2024. The total crude oil production volume in January this year was 44.2 million barrels, while with condensates it was 50.93 million barrels.

For daily production, crude oil output was 1.43 million barrels in January 2024, while with condensates it was 1.64 million barrels.

Analysts believe this surge in oil revenue could provide a much-needed boost to the Nigerian government’s coffers. However, they caution that long-term economic planning should not solely rely on oil as global energy markets can be volatile.