The Federal Government’s oil revenue target for May decreased significantly from N804 billion to N223 billion, reflecting a 72% reduction in federal earnings, as revealed by statistics from the Central Bank of Nigeria’s Monthly Economic Report for May 2023.
The report highlighted that oil revenue at N223 billion for May was 36% below the receipts in the preceding month and significantly below the monthly target of N804 billion.
This observed decline in oil revenue was primarily attributed to lower receipts from Petroleum Profit Tax and Royalties. The report also indicated a drop in gross federation earnings due to lower oil and non-oil receipts.
Federation revenue, totalling N837 billion, was 16% lower than the level in April and 53% below the budget target, News About Nigeria reports.
The report emphasised that non-oil revenue sources continued to dominate, accounting for 73.4% of federation revenue in the review period.
Non-oil receipts stood at N614 billion, which was 5.4% less than the level in April and 36% below the target.
This shortfall was primarily attributed to lower collections from Company Income Tax, Value Added Tax, and customs and excise duties, influenced by the seasonality in tax return filing by businesses in Nigeria.
The Central Bank of Nigeria report also noted that earnings from crude oil weakened due to declining crude oil prices, exacerbated by the United States debt situation.
Crude oil and gas export receipts fell by 3.8% to $4.06 billion from $4.22 billion in April. This included a 4.2% decline in crude oil export receipts to $3.58 billion and a 2.1% drop in gas export receipts to $0.49 billion.
Domestic crude oil production increased to 1.18 million barrels per day, while crude oil exports rose to 0.73 million barrels per day, mainly due to the lifting of a force majeure by Exxon Mobil.
However, the country’s production remained below the OPEC monthly quota of 1.742 million barrels per day.
Economic experts attribute the low crude oil exploration and production levels to various challenges, including security issues, pipeline vandalism, oil theft, and the slow implementation of the Petroleum Industry Act.
