Lagos — Nigeria raked in more revenue from Value Added Tax, VAT on oil and gas production in the first half of 2020 despite the COVID19 pandemic which saw those products experiencing low demand on the international market.
Data collected from the Nigerian Bureau of Statistics, NBS’ report on ‘Sectoral Distribution Of Value Added Tax H1 2020’, showed that Africa’s largest producer of oil and gas raked in N2, 668,277,236 VAT from gas H1 2020.
A breakdown showed that the sum of N1,294,001,132 was recorded in Q1 and N1,394,276,103 in Q2, representing a growth rate of 7.75 percent between Q1/Q2 2020, and a growth rate of 3.23 percent year-on-year.
The country had recorded N1,529,466,433 from gas VAT in Q1 2019, N1,074,711,768 in Q2, 2019, N1,021,067,892 Q3 and N934,249,398 in Q4.
Group managing director at the state oil firm, NNPC, Mele Kyari had said year 2020 is a year of gas as the government keeps putting more infrastructures in place to attract investors and cash in more on the country’s vast gas deposits. To this end, the Buhari government had ramped up its efforts on the gas commercialisation initiative, crashing the country’s gas flare rate to 10 percent. It targets zero rates by end of the year.
On the other hand, NBS data showed that oil production fetched the country a total of N18,013,560,521 VAT in first half of the year with N9,353,657,476 recorded in Q1 and N8,659,903,045 in Q2.
A negative growth rate of -7.42 percent was recorded in Q2/Q1 2020, yet it resulted in a 10.50 percent positive growth year-on-year.
The sum of N8,490,827,446 was made from VAT on oil production in Q1 2019, N7,811,745,534 in Q2, N11,339,815,578 in Q3, and N11,150,265,395 in Q4 2019.
The coronavirus had forced down oil and gas consumption, leading to low oil prices, and dwindling exports due to oversupply from oil-producing nations across the world.
International Brent fell to $22.58 a barrel in March, and around $19 in April, its lowest level since November 2002. The West Texas Intermediate had as a matter of concern, traded at -$37.63 per barrel around that time, specifically April 20. Oil traded at almost $150 per barrel in 2008 and around $100 during the first oil price collapse of 2014/2015. This heralded cuts by the Orgainzation for Petroleum Exporting Countries, OPEC, and its non-OPEC partners, as a result, boosting oil prices back up to around $80 per barrel.
Brent traded at $45 per barrel around 12:30 pm Nigerian time on Thursday.
On petro-chemical and petroleum refineries, NBS said the sum of N2,230,993,645 was recorded in the first half of 2020: N1,312,131,574 in Q1, and N918,862,071 in Q2.
This represents a growth rate of -29.97 percent between Q2/Q1, and 3.54 percent year-on-year.
Total of N956,166,806 was realised in Q1 2019, N1,198,575,081 in Q2, N1,056,930,065/Q3, and N861,867,478 in Q4 2019.
Nigeria currently does not refine enough petroleum products to cater for its over 200 million populace. As a result, the country relies heavily on importation as its four refineries especially that of Kaduna had recorded zero refining capacity in the last year. The country looks to the modular refinery option for hope- three(5000 barrels per day Waltersmith at Ibegwe in Imo state, 7,000 bpd OPAC Refineries Limited at Umuseti, Delta State and 5,000 bpd Niger Delta Petroleum Resources (Train2) at Ogbele, Rivers States ) are currently in its bucket list. That of Waltersmith is due for commissioning this month, not forgetting Dangote’s 650, 000 barrels per day facility expected to come on stream by 2021.
From its offshore operations, the country raked in N1,075,849,907 in H1 2020: N592,056,030 in Q1, and N483,793,877/Q2, representing a growth rate of -18.29 Q2/Q1, and growth rate of -9.37 percent year-on-year.
The sum of N529,173,488 was recorded on VAT from offshore in Q1 2019, N657,941,208/Q2, N626,213,825/Q3, and N900,109,136 in Q4.
Nigeria has a total of 159 oil fields and 1481 wells in operation according to the Department of Petroleum Resources, DPR. The most productive region of the nation is the coastal Niger Delta Basin in the Niger Delta or “South-south” region which encompasses 78 of the 159 oil fields.
According to the NBS, oil marketing fetched Nigeria the sum of N4,321,867,542 on VAT in H1 2020.
A breakdown showed that N2,385,256,224 was raked in Q1 and N1,936,611,317 in Q2.
This represents a growth rate of -18.81 percent Q2/Q1 and -0.35 percent year-on-year.
Collection of N2,340,806,300 was recorded in Q1 2019, N1,996,390,157/Q2, N2,175,975,703/Q3, and N2,033,605,360 in Q4.