Nigeria recorded N16 trillion from crude oil sales between January and September, according to newly released government data, weeks after the country’s apex bank said the state-oil company has yet to make remittance to it.
Godwin Emefiele, governor of CBN, last month said foreign exchange receipt from crude oil sales into Nigeria’s official reserves has dried up steadily from above $3 billion monthly in 2014 to $0 today.
Analysts say lower oil production arising from crude theft and subsidy payments for refined petrol crimps foreign exchange receipts from crude oil sales.
“Subsidy payments, operation costs and low oil production are factors that limit the remittance of foreign earnings to CBN,” said Etulan Adu, an oil and gas production engineer.
According to data gathered from the National Bureau of Statistics (NBS), Nigeria earned N5.6 trillion in the first quarter, N5.9 trillion in the second quarter and N4.6 trillion in the third quarter of 2022.
NBS data show that the value of crude oil exports in Q3 rose by 16 percent compared to N4 trillion recorded in the corresponding period last year. On a quarter-to-quarter analysis, it reduced by 21 percent from N5.9 trillion in Q2 2022.
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The second quarter recorded the highest amount earned from crude sales this year, due to the high demand in the global market and price increase in that period. This quarter also recorded the best crude oil export revenue since the COVID-19 pandemic.
“The increase in crude oil export revenue in the second quarter is connected to the high demand in the global market and the price increases in the same period,” said Collins Obi, an energy sector expert.
“The disruptive effect of the war in Ukraine to supply chains and critical goods, including crude oil are factors to consider that contributed to the price increase of crude oil in the international market.”
The third quarter of this year recorded the least sales from crude oil. This can be attributed to the low oil production during this period.
The Nigerian Upstream Petroleum Regulatory Commission, in its oil production status report, showed that Nigeria produced less than 1 million bpd in August and September.
In that same period, the real growth of the country’s oil GDP reduced by 23 percent, due to the decline in oil production.
Findings showed Nigeria’s forex challenges became obvious in 2016, when oil revenue, which accounts for more than half of total collected revenue, declined significantly owing to a collapse in global oil prices and a plunge in domestic oil production volume due to activities of militants in the oil-rich Niger Delta.
While oil prices rebounded, Nigeria’s oil production struggled to recover from an average of 2 million barrels per day (bpd) in 2016.
Calculations by BusinessDay showed the country’s output averaged 1.34 million bpd in the first 10 months of 2022 against the 2022 budget benchmark of 1.88 million bpd, costing the nation about 161.58 million barrels in lost production worth about $16.7 billion.
The country has also been unable to meet its OPEC quota since November last year at a time of rising oil prices and severe revenue and foreign exchange woes at home.
Analysts blamed massive oil theft, vandalism of major assets, dilapidated infrastructure and declining upstream investment for Nigeria’s inability to earn more petrol dollars.
