13 January 2015, Lagos – Continuous decline in the price of crude oil has caused Nigeria to lose as much as N77.2 billion from oil revenue in one month, according to data obtained from the Central Bank of Nigeria, CBN.
Specifically, the CBN in its October 2014 Economic Report, disclosed that oil revenue for the month dropped by 14.11 per cent to N470 billion from N547.2 billion recorded a month before.
Similarly, non-oil revenue also declined by N11.1 billion or 3.9 per cent from N284.6 billion in September 2014 to N273.5 billion in October.
As a result, gross federally-collected revenue depreciated by 10.6 per cent or N88.2 billion from N831.8 billion in September to N743.6 billion in October.
Giving a breakdown of gross oil revenue components for October, the CBN stated that crude oil/gas sales dropped to N117.8 billion from N160.4 billion recorded in the previous month, while domestic crude oil/gas sale appreciated by N6 billion or 6.4 per cent to N99.6 billion from N93.6 billion recorded in September.
Petroleum Profit Tax, PPT/Royalties, according to the CBN, also dipped by N25.5 billion or 9.19 per cent to N251.9 billion in October, from N277.4 billion recorded in the previous month.
The CBN attributed the drop in the country’s oil revenue to a decline in crude oil and gas exports receipts due to the fall in the price of crude oil in the international market.
The CBN said, “At N470.04 billion, gross oil receipts, which constituted 63.2 per cent of the total revenue, was lower than both the monthly budget estimate and the preceding month by 21.3 and 14.1 per cent, respectively.
“The decline in oil receipts relative to the monthly budget estimate was attributable to fall in receipts from crude oil and gas exports due to the fall in the price of crude oil in the international market.”
Continuing, the CBN said that of the gross federally-collected revenue, about N457.12 billion less all deductions and transfers was transferred to the Federation Account for distribution among the three tiers of government and the 13 per cent Derivation Fund.
According to the CBN, the Federal Government received N217.77 billion; the state and local governments received N110.46 billion and N85.16 billion, respectively, while the balance of N43.73 billion was distributed to the oil-producing states as 13 per cent Derivation Fund.
“From the Value Added Tax (VAT) Pool Account, the Federal Government received N9.37 billion, while the state and local governments received N31.25 billion and N21.87 billion, respectively,” the CBN added.
A further analysis of activities in the oil sector during the period in review, the CBN put Nigeria’s crude oil production, including condensates and natural gas liquids, at an average of 2.0 million barrels per day (mbd) or 62 million barrels for the month.
This, the CBN said, was 0.05 mbd or 2.4 per cent lower than the 2.05 mbd or 61.50 million barrels produced in the preceding month.
The CBN said, “Crude oil export was estimated at 1.55 mbd or 48.05 million barrels for the month. This represented a decline of 3.1 per cent below the level recorded in the previous month. Deliveries to the refineries for domestic consumption remained at 0.45 mbd or 13.95 million barrels in the review month.
At an estimated average of US$88.78 per barrel, the price of Nigeria’s reference crude, the Bonny Light (37º API), fell by 9.9 per cent below the level in the preceding month.”
*Michael Eboh – Vanguard