Fakoyejo Olalekan
Nigeria’s oil revenue will fall next year according to the projection made by President Muhammadu Buhari on Thursday during the presentation of 2023 budget to the National Assembly.
Prime Business Africa had reported that President Buhari presented N20.51 trillion budget, which he increased from the previously submitted N19.76 trillion.
Join our WhatsApp ChannelDuring the presentation, he made several projections for Nigeria’s economy next year, and one of it includes the oil revenue estimate, which he puts at N1.92 trillion.
Prime Business Africa understands that earnings from the industry will fall about -39.2 per cent year-on-year, when compared with the N3.16 trillion projection President Buhari made for oil revenue this year.
This means Nigeria will lose an estimated N1.24 trillion in oil revenue next year, further compounding the revenue problem of the Federal Government.
Nigeria’s revenue problem has forced the Buhari administration to request approval from the National Assembly to borrow N8.80 trillion to finance the N10.78 trillion deficit in the budget.
What you need to know
It was gathered that in 2023, Nigeria will be pumping fewer oil than its capacity and below the present quota issued to the country by the Organization of the Petroleum Exporting Countries plus (OPEC+).
In 2023, when Nigeria’s oil revenue is expected to drop by N1.24 trillion, Buhari estimated daily crude oil production will be 1.69 million barrels (inclusive of Condensates of 300,000 to 400,000 barrels per day).
This is below the 1.88 million barrels that the President projected for this year, even though the country has struggled to produce above 1.60 million barrels per day. Also, the figure estimated for 2023 is below the OPEC+ quota of 1.830 million barrels per day.
Buhari’s low oil revenue projection is on the back of his administration putting oil price benchmark at $70 per barrel for next year, which surpasses the $57 he submitted as benchmark for 2020.
Note that the current oil price is $92.64 per barrel, and the cost is expected to rise even further next year, considering OPEC+ has cut production level by two million barrels per day in a bid to stop the price from falling.
This means as other countries profit from the boom in oil price, Nigeria will be at the bottom list of gainers. This was reflected in the 2021 earnings of NNPC Limited, which recorded N674 billion (over $1 billion), while Saudi Arabia’s Aramco reported $110 billion, rising from $49 billion in 2020.
