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Nigeria’s crude oil export earnings slumped to $12.1 billion in Q2, 2024 as against $12.4 billion in the preceding Q1, reflecting the decline in domestic crude oil production to 1.27 million barrels per day in Q2, 2024 from 1.33 million bpd previously.
Data from the Economic Report for the period released by the Central Bank of Nigeria (CBN) also showed that Nigeria’s Organisation of Petroleum Exporting Countries (OPEC) crude oil production deficit recorded a deficit of 308,000 bpd.
The country has struggled for years to meet its OPEC quota, which was last year slashed to 1.58 million bpd by the international oil cartel, after Nigeria consistently failed to fulfil its pledge to drill more oil.
Nigeria blames unprecedented levels of oil theft, waning investment made worse by the energy transition, vandalism, outright sabotage by local oil producing communities, among others, for its inability to significantly raise output.
“Domestic crude oil production declined in Q2, 2024, attributed to persistent oil theft and illegal refining activities in the Niger Delta region. Nigeria’s average crude oil production fell by 4.51 per cent to 1.27 million bpd in Q2, 2024, from 1.33 million bpd in the preceding quarter.
“This was due to crude oil theft and pipeline vandalism in the Niger Delta region, leading to a decline in production from the Forcados, Bonny, Qua-Iboe, Escravos and Brass streams, respectively. Nigeria’s crude oil production level fell short of its OPEC quota of 1.58 million bpd by 308,000 bpd in Q2, 2024,” the CBN report stated.
In all, merchandise export earnings declined in Q2,2024, primarily on account of the fall in crude oil export receipts, following the drop in domestic crude oil production.
Aggregate export earnings, the report said, declined by 1.76 per cent to $13.94 billion in Q2, 2024, from $14.19 billion in Q1,2024.
“A breakdown of export receipts showed that receipts from oil export fell to $12.18 billion from $12.42 billion in the preceding quarter, reflecting the decline in domestic crude oil production to 1.27 million bpd in Q2, 2024 from 1.33 million bpd in the preceding quarter,” the CBN Q2 report added.
However, overall, the deficit from oil production earnings was largely covered by the average spot price of Bonny light, which rose to $86.97 per barrel from $85.58 per barrel.
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This largely cushioned the reduction in oil export receipts, with receipts from non-oil exports also declining to $1.76 billion from $1.77 billion in Q1, 2024, attributed to the decline in other non-oil export receipts, particularly, agricultural products.
Analysis by share of total export indicated that crude oil and gas exports continued to dominate, constituting 87.38 per cent, while non-oil exports accounted for the balance.
Merchandise import also decreased in Q2,2024, following the decline in the import of petroleum products, reducing by 20.59 per cent to $8.64 billion, from $10.88 billion in Q1, 2024.
Analysis by composition indicated that oil imports decreased to $2.79 billion, from $4.31 billion in the preceding quarter. Non-oil imports also declined to $5.85 billion, from $6.57 billion in the previous quarter.
A breakdown of total import showed that non-oil imports accounted for 67.72 per cent, while oil imports constituted the balance.
Besides, gross federation account earnings improved in Q2, 2024, on account of higher receipts from oil and non-oil sources. At N6.28 trillion, provisional gross federation account receipt was 26.37 per cent above the level in Q1, 2024, but 30.17 per cent below the benchmark.
According to the CBN document, the improved performance reflected higher realisations from royalties, Petroleum Profit Tax (PPT), independent revenue of the federal government and upstream Company Income Tax (CIT).
With regards to the composition of gross federation revenue, non-oil revenue remained dominant, accounting for 72.42 per cent, while oil revenue constituted the balance.
Also, non-oil revenue, at N4.55 trillion, was 32.22 per cent and 23.07 per cent above the levels in the preceding quarter and the target, respectively. The increase was driven, largely, by higher collections from independent revenue, Value Added Tax (VAT) as well as customs and excise duties.
The CBN also highlighted the performance of the electricity sector, saying that it improved in Q2 due to increased water supply to hydro substations, rise in gas supply to thermal stations, and enhancements in electricity transmission and distribution infrastructure.
“Thus, the average estimated electricity generation in Q2,2024 at 4095.24 MW/h, increased by 6.19 per cent relative to 3,856.50 MW/h in Q1, 2024.
“Also, the average estimated electricity consumption, at 3,918.15 MW/h increased by 4.47 per cent in Q2, 2024 compared with 3,750.40 MW/h, in the preceding quarter.
“Similarly, the index of electricity production increased by 194.47 per cent on a q-o-q basis against a contraction of 46.04 per cent in Q1, 2024. However, on a y-o-y basis, the index recorded a slower growth of 6.79 per cent, relative to 11.02 per cent in the corresponding period,” the CBN report said.
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