Oil revenue declines by N129bn in Q2 of 2016

DUE to increased militant’s restiveness in the Niger Delta region, Nigeria’s crude oil earning declined by N128.94 billion in the second quarter of 2016, dipping by N537.19 billion. In the Central Bank of Nigeria’s Economic report for the second quarter of 2016, oil earnings dropped by 19.36 per cent from N666.13 billion recorded in their first half of 2016.

According to the report, the development was attributed to the continued fall in receipts from crude oil/gas exports arising from a persistent low price of crude oil and incidences of shut-ins and shut-downs at some Nigerian National Petroleum Corporation, NNPC, terminals, owing to pipeline vandalism.

The CBN further stated that Nigeria’s crude oil production, including condensates and natural gas liquids stood at an average of 1.54 million barrels per day (mbd) or 141.68 million barrels (mb) for the second quarter of 2016.

It noted that Nigeria exported 1.09 million barrels per day of crude oil or 100.28 million barrels in the second quarter of 2016, while deliveries to the refineries for domestic consumption stood at 0.45 mbd or 41.40 million barrels during the review quarter.

“At N1.159 trillion, total federally-collected revenue was 51.3 and 8.6 percent lower than the quarterly budget estimate and the preceding quarter’s receipts, respectively. At N537.19 billion or 46.3 percent of the total, gross oil receipt was lower than both the provisional quarterly budget and the receipts in the preceding quarter. The report stated that non-oil receipts, at N621.86 billion or 53.7 percent of the total, was above the level in the preceding quarter by 3.2 percent but was significantly lower than the proportionate quarterly budget.

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“Federal Government retained revenue was N677.88 billion, while total expenditure was N1.769 trillion, resulting in an estimated deficit of N1.091 trillion in the second quarter of 2016, compared with the proportionate quarterly budget deficit of N555.49 billion.”

The CBN further stated that of the gross federally-collected revenue, a net sum of N665.67 billion was transferred to the Federation Account for distribution among the three tiers of government and the 13.0 per cent Derivation Fund, adding that N100.92 billion, N186.83 billion and N48.09 billion were transferred to the Federal Government Independent Revenue, VAT Pool Account, and Others, respectively.

It added that the Federal Government received N323.16 billion, while the state and local governments received N163.91 billion and N126.37 billion, respectively.

It said, “The balance of N52.23 billion was allocated to the 13.0 per cent Derivation Fund for distribution among the oil-producing states. The Federal Government also received N28.02 billion from the VAT Pool Account, while the state and local governments received N93.41 billion and N65.39 billion, respectively.”