Nigeria's FG earns N7.6trn from oil in 10 months

No Comments » December 22nd, 2008 posted by // Categories: Nigeriawatch



FG earns N7.6trn from oil in 10 months


Written by Gabriel Omoh, Business Editor   

Monday, 22 December 2008


FORTUNE smiled on Nigeria this year as income from oil in the first 10 months (January to October) hit N7.6 trillion, some 210% of the N3.606 trillion projected to accrue from oil for the whole year. Non-oil sources of revenue were also billed to generate N923 billion.

However, the huge revenue seems not to have rubbed off on the average Nigerian who remains poverty-striken, surviving on less than a dollar a day.

The earnings were the value of domestic deliveries to refineries and crude oil export for the period. Figures obtained from the Central Bank (CBN), the Department of Petroleum Resources and the Nigerian National Petroleum Corporation (NNPC) show that a total 451.02 million barrels of crude oil were exported from Nigeria of a total production of 588.82 million barrels produced during the 10 months from January to October 2008, which  amounted to the N7.60 trillion.

While the value of crude oil export for the 10 months stood at N5.706 trillion, domestic consumption amounted to N1.899 trillion.

The Federal Government in the 2008 budget projected receipts of N4.529 trillion into the Federation Account. It put oil-related receipts at N3.606 trillion or 80 per cent of this sum, while non-oil sources of revenue were to account for the balance of N923 billion or 20 per cent.  

This revelation, according to Vanguard’s investigation, is at variance with  President Umaru Yar’Adua’s position in his 2009 budget speech where he said: “In addition to volatility in international oil prices, actual crude oil production has been lower than projected, averaging just over two million barrels/day, due to the situation in the Niger Delta. As a result, overall revenue receipts have been well below expectation.”

In interpreting the revenue profile, economic experts said if in the years of high oil revenue, the government failed to implement fully its budget, how would it fare in a lean period, for according to Yar’Adua, “the performance of the 2008 budget has been mixed and indeed far from satisfactory.

While releases of budgetary allocations to the MDAs have been on course, with 100 per cent of the capital vote released by the middle of November, actual utilisation has not kept pace with the releases due to a number of factors which we are closely looking into.

“On the revenue side, although international oil prices reached record high levels in the first half of 2008, overall revenue performance has been below expectation, due to domestic oil production disruptions and declining international energy prices, as the global economy responds to the transnational financial crisis.”

A breakdown of the figure of oil export from Nigeria showed that in January while a total 65.1 million barrels were produced at the rate of 2.10 million barrel per day, a total 51.15 million barrels were exported at the rate of 1.65 million barrels per day. At the average price of $94.26 at which crude was sold, a total $6.136 billion worth of crude were produced.

The nation in January, however, exported 51.15 million barrels at $94.26, thus realising a total $4.821 billion.

According to the figure of oil production and export from Nigeria in the month of February, while 57.4 million barrels of crude oil were produced amounting to $5.633 billion at the ruling price of $98.15, the export of 44.8  million barrels of crude oil in the month generated $3.533 billion into the federation account.

In March when prices of crude oil rose above the $100 mark, the average price Nigeria crude sold for, according to the Department of Petroleum Resources, was $103.73. At this price level, Nigeria produced two million barrels per day and a total 62 million barrel were produced, amounting to $6.431 billion.

However, in March the export volume dropped from 1.6 million barrel a day to 1.55 million barrel, indicating that 48.05 million barrels of crude oil, amounting to $4.984 billion, was exported and the amount credited to the federation account.

The DPR, NNPC and CBN data in the month of April crude oil production went down to 1.81 million barrels per day and at the end of April, the volume of production was 54.3 million barrels.

But the price of crude rose to $116.73, thus giving the total value of crude produced in April at $6.338 billion.

Export figures for the month, however, lagged behind as it dropped further from 1.55 million barrels per day to 1.36 million barrels per day, thus generating crude oil revenue of $4.762 billion into the federation account.

Crude oil production figure for the month of May also showed that average production per day was 1.86 million. As a result total production for the month was 57.66 million barrels.

In May, however, prices of crude rose further and Nigeria crude was sold in the international market for $126, thus generating a total of $5.532 billion into the federation account from where allocation was made to the federal, state and local governments.

In June, while the daily output of crude was 1.8 million barrels per day, the total volume produced was 54 million barrels which total value at $138.74 per barrel amounted to $7.491 billion.

Export, however, dropped to 1.35 million barrels per day and a total 40.5 million barrels was exported amounting to $5.6189 billion according to government figures.

In the same vein, crude oil production per day for the month of  the July had a record figure of 1.9 million barrels per day. As a result, a total 58.9 million barrels were produced out of which 44.95 million barrels were exported at the prevailing price of $141.86 per barrel.

This led to the accretion to the federation account the sum of $6.3766 billion in July when the international price of crude was at its peak.

In August when the price of crude declined to $115.84 per barrel, total export volume stood at 46.81 million barrels resulting in the nation earning $5.4224 billion. In September, total export volume of crude stood at 45 million barrels while price was $103.83, the earnings from oil dropped to $4.703 billion and $3.531 billion in October.

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