…Fuel subsidy wipes off oil, gas export revenues
Dublin, Ireland — Nigeria earned N412.1 billion from the oil and gas sector in July 2021, rising by 43.54 per cent from N287.04 billion recorded in June 2021, according to latest economic data released by the Central Bank of Nigeria, CBN.
The CBN, in its Economic Report for July 2021, also stated that on a month-on-month basis, the earnings from the oil and gas sector in July, represented an appreciation of 57.06 per cent compared with the N262.38 billion recorded in the same month in 2020.
Giving a breakdown of earnings from the petroleum sector, the CBN stated that the country recorded zero earnings from crude oil and gas exports in July 2021, same as in June 2021, due to petrol subsidy, while Petroleum Profit Tax, PPT, and Royalties grew by 102.24 per cent from N173.62 billion recorded in June 2021 to N351.13 billion in the month under review.
Month-on-month, July 2021 PPT and Royalties is also 141.76 per cent higher than the N145.24 billion recorded in July 2020.
However, domestic crude oil and gas sales stood at N52.64 billion, dropping by 49.61 per cent and 23.06 per cent compared with N104.47 billion and 68.42 billion recorded in June 2021 and July 2020, respectively.
Other oil and gas earnings, according to the CBN, dipped to N8.33 billion, from N8.95 billion and N8.58 billion recorded in June 2021 and July 2020, respectively.
The CBN explained that other oil and gas earnings include education tax, customs special levies (Federation Account), national technology development, customs special levies, solid mineral & other mining revenue, and other non-regular earnings.
The apex bank disclosed that the contribution of oil at N412.10 billion was its strongest since May 2020, despite zero remittance from crude oil sales and exports, which was absorbed by the cost of petrol subsidy.
It further stated that Nigeria’s oil earnings was driven by a 102.2 per cent surge in receipts from petroleum profit tax and royalties, following the rebound in crude oil prices.
It said: “Nigeria’s crude oil and gas export receipts decreased due largely to lower-than-expected gas export. The value of crude oil and gas export decreased by 1.0 per cent to $3.99 billion, compared with $4.04 billion in June 2021.
“A breakdown indicates that the value of gas export decreased by 17.9 per cent to $0.46 billion. The decline in gas export was due, majorly, to the lower export of liquefied petroleum gas (LPG) in the review period.
“The value of crude oil export, on the other hand, increased by 1.7 per cent to $3.53 billion in July 2021. The increase in crude oil receipts was due, majorly, to improvement in both price and production to $75.93 per barrel (pb) and 1.50 million barrels per day (mbpd) in July 2021, relative to $73.46 pb and 1.47 mbpd in June 2021. Crude oil and gas exports component remained dominant, contributing 89.7 per cent of total exports, with oil accounting for 79.3 per cent and gas export 10.4 per cent.”
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