JUST IN: Nigeria’s 2025 N54. 99trn Budget Suffers Setback As 93.7 Million Crude Oil Barrels Lost In 8 Months
Nigeria has recorded a crude oil production shortfall of about 93.74 million barrels between January and August 2025, raising serious concerns over the government’s capacity to adequately fund the 2025 national budget.
The deficit, according to reports, translates to an estimated $6.85 billion in lost oil revenue, the main source of the country’s fiscal inflow, and about $7.03 billion when measured against the government’s $75 per barrel budget benchmark.
Data obtained from the Central Bank of Nigeria (CBN) indicated that Nigeria’s Bonny Light crude averaged $73.06 per barrel within the eight-month period, while fresh figures from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) showed that total crude oil and condensate production stood at 406.84 million barrels, against the budget projection of 500.58 million barrels for the period, a shortfall of 18.27 per cent.
The 2025 federal budget was based on an expected daily crude oil production of 2.06 million barrels per day, but actual output averaged only 1.673 million barrels per day from January to August, representing an average deficit of 390,000 barrels per day.
If the production trend persists through the remaining four months of the year, Nigeria risks losing an additional 47.58 million barrels by December, which could wipe off another $3.56 billion in expected earnings.
Billions Lost Across Q1 to Q3
A closer look at the NUPRC data reveals that the country missed its production target by 35.01 million barrels in the first quarter (Q1 2025), representing a market value of $2.625 billion.
The second quarter (Q2 2025) recorded another 34.67 million barrels in lost production, valued at $2.592 billion.
The situation worsened in the third quarter. In July alone, the output deficit stood at 10.78 million barrels, equivalent to $808.5 million, while in August, another 13.28 million barrels were lost, valued at $996 million.
This brings the total cumulative production shortfall to 93.74 million barrels in the first eight months of 2025.
Meanwhile, the Commission, in its August 2025 report to the Federation Account Allocation Committee (FAAC), disclosed that it recorded a ₦459.6 billion revenue shortfall against its ₦1.2 trillion budgetary target for the month after remitting ₦745 billion.
In July, the remittance stood at ₦723.17 billion, leaving a combined ₦941.23 billion gap in oil and gas revenue over the two-month period.
The report noted: “Total collection increased by ₦22.04 billion, equivalent to 3.05 percent when compared with July 2025. The increase in collection for the month of August 2025 can be attributed to a revenue drive that led to improvement in almost all the revenue heads.”
Despite the modest rise, performance fell short due to weak royalty inflows. Out of a projected ₦1.144 trillion monthly royalty target, only ₦682.28 billion was realised in August, leaving a ₦461.89 billion gap.
Between January and August 2025, the Commission said it had transferred ₦5.475 trillion to the Federation Account through the Central Bank of Nigeria (CBN), far below the ₦8.433 trillion expected from the sector.
NUPRC’s Performance Figures
In its report, the NUPRC clarified that its cumulative performance from January to August 2025 stood at ₦7.103 trillion, inclusive of NNPC Limited Joint Venture (JV) and Production Sharing Contract (PSC) royalty receivables amounting to ₦1.050 trillion, as well as Project Gazelle receipts of ₦730.24 billion for November 2024 (received in January 2025), and other receipts from January, March to June 2025.
Naija News reports that despite the federal government’s optimism, persistent oil theft, pipeline vandalism, and weak upstream investment continue to cripple the sector’s performance.
Industry experts have warned that unless these issues are urgently addressed, the government’s 2025 revenue targets will remain unattainable.
In a recent interview with Vanguard, Partner at Zera Advisory, Engr. Joe Nwakwue, said the government’s projections on both production and price were overly ambitious.
“It’s certainly a stretch. Most unlikely, we would achieve both volume and price targets going by current trends,” Nwakwue said.
“However, there has been a significant uptick in non-oil revenue generation. I hope these improvements will address the shortfall in oil revenue.”
On the daily production target of 2.06 million barrels, Nwakwue added: “Volume growth takes time and resources, and resources take time to mobilize.”
In his own remarks, Chief Executive Officer of AHA Consultancies, Henry Adigun, described the government’s oil projections as “unrealistic and repetitive mistakes.”
“Every year they make false assumptions and projections that are unrealistic,” Adigun said.
“This leads to poor budget performance because they don’t have the fundamentals right. What we expect are figures that reflect actual capability.”
He noted that the tendency to overestimate oil output forces the government to resort to borrowing to finance deficits.
“They rely on false projections that are not based on facts and figures,” he stressed.
Government Remains Optimistic
However, the Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, maintained that the government’s 2 million barrels per day production target was still achievable before year-end.
He admitted that access to financing remained a major bottleneck for Nigerian upstream operators but said efforts were underway to ease that challenge through the creation of the $5 billion Africa Energy Bank, to be headquartered in Nigeria.
“We have discovered that the biggest challenge we have in Africa is access to finance, and that is why we have come up with the African Energy Bank, which is ready to go,” Lokpobiri said.
“Nigeria, as the host country, has met all its obligations, legal and financial. We are waiting for the bank to take off any moment from now.”
According to him, once the bank becomes operational, it will help mobilise local capital for the energy sector and “change the game” for African oil-producing nations.
NUPRC Eyes 2.5 Million Barrels Daily by 2027
On his part, the Commission Chief Executive (CCE) of NUPRC, Engr. Gbenga Komolafe, said Nigeria’s long-term oil production goal is to reach 2.5 million barrels per day.
He disclosed that since the Commission’s establishment, crude oil production had increased gradually, with current daily output averaging 1.65 million barrels per day.
“This is expected to rise further under the Project 1 Million Barrels Per Day (1mbpd) initiative, which aims to push national production to 2.5 million barrels per day by 2027,” Komolafe stated.
He added that the Commission had approved 38 Field Development Plans (FDPs) in 2025 alone, attracting an estimated $19.43 billion in fresh upstream investments.
Industry experts have continued to stress that Nigeria’s oil output growth depends largely on resolving insecurity, sabotage, and regulatory inconsistencies.
According to Nwakwue, a former Chairman of the Society of Petroleum Engineers (SPE Nigeria): “The government and the industry must collaborate to address insecurity and sabotage, ensure sustainable JV funding, and provide regulatory certainty.”
Similarly, an energy economist, Prof. Wumi Iledare, expressed cautious optimism, predicting that with sustained reforms and implementation of the Petroleum Industry Act (PIA), production could reach 1.8 million barrels per day before the end of the year.
“You cannot have 37 billion barrels of reserves and produce only 1.4 million barrels daily, that’s too low,” Iledare said.
“Technically, a country with that reserve base should produce at least 3% of its proven reserves, which is around three million barrels per day.”
He added that Nigeria’s biggest challenge lies in sector governance and institutional empowerment, noting that full implementation of the PIA would unlock the sector’s full potential.
“If governance of the sector is strengthened and institutions empowered according to the law, producing three million barrels per day is achievable,” he affirmed.
Naija News reports that with the oil sector still underperforming, analysts warn that the federal government’s 2025 fiscal framework could face severe strain, especially as oil remains the dominant funding source.
Unless production improves, the estimated ₦28.7 trillion 2025 budget may face a financing gap that could force fresh borrowing or spending cuts in the coming months.
