Despite an improvement in crude oil production, the Federal Government earned 63.49 per cent less than its projected oil revenue target in the first half of 2025, according to the second quarter Budget Performance Report released by the Budget Office on Monday.

The report showed that gross oil revenue of N9.32tn was recorded between January and June 2025, far below the N25.52tn pro-rated budget projection for the period. This translated into a N16.20tn shortfall, underscoring the persistent fragility of Nigeria’s oil-dependent fiscal structure.

Data from the report also indicated that average crude oil production stood at 1.68 million barrels per day, below the budget benchmark of 2.12mbpd, with significant revenue implications for the Federation Account.

However, output improved marginally compared with earlier periods, rising by 0.08mbpd from the 1.6mbpd recorded in the first quarter of 2025 and by 0.27mbpd above the 1.41mbpd produced in the corresponding period of 2024.


Despite missing its revenue target, the half-year performance marked a notable improvement year-on-year, as oil revenue increased by N2.78tn, or 42.59 per cent, compared with the actual half-year earnings recorded in 2024.

The report read, “Gross oil revenue amounting to N9.32tn was collected in the first half of 2025 as against N25.52tn prorate budget projection for the period. This denotes a decrease of N16.20tn (63.49 per cent) from the 2025 half-year budget estimate. It, however, reflects an increase of N2.78tn (42.59 per cent) from the actual half-year gross oil revenue performance reported in 2024.”

Crude oil has remained Nigeria’s single most important source of foreign exchange and public revenue for over five decades, accounting for about 80–90 per cent of export earnings and more than half of government revenue in most fiscal years.

Earnings from crude oil exports largely determine the country’s foreign exchange inflows, the strength of the naira, and the volume of funds available for distribution to the federal, state, and local governments through the Federation Account Allocation Committee.

These revenues are highly sensitive to international oil prices, production volumes, exchange rates, and fiscal terms, making government income vulnerable to external shocks.

Despite its dominance, Nigeria’s reliance on oil has exposed the economy to repeated fiscal stress during periods of price crashes or production disruptions. Challenges such as crude oil theft, pipeline vandalism, underinvestment, operational inefficiencies, and regulatory uncertainty have often constrained output and revenue performance, even when global oil prices are favourable.

A detailed breakdown of the figures revealed mixed outcomes across revenue lines. Concessional rentals surged to N24.82bn, exceeding the half-year projection of N2.06bn by N22.77bn (1,106.99 per cent), while miscellaneous oil revenue, including pipeline fees, rose to N29.73bn, beating its N11.72bn projection by N18.01bn (153.65 per cent).

In contrast, the major oil revenue streams significantly underperformed. Crude oil and gas sales generated N712.57bn, falling short of the N2.36tn target by N1.64tn (69.76 per cent). Petroleum Profit and Gas Taxes yielded N4.16tn, missing the projection of N15.69tn by N11.53tn (73.47 per cent).

Similarly, oil and gas royalties stood at N3.53tn, lower than the N6.86tn estimate by N3.33tn (48.54 per cent), while incidental oil revenue, including royalty recoveries and marginal field licences, came in at N438.90bn, undershooting its N591.76bn projection by N152.87bn (25.83 per cent).

The report also noted that gas flaring penalties and exchange gains, which had no half-year budget projections, contributed N267.25bn and N148.31bn, respectively, during the period under review.