Nigeria has recorded a crude oil production shortfall of about 93.74 million barrels between January and August 2025, raising fresh concerns over the government’s ability to adequately fund the 2025 national budget, which is largely dependent on oil revenue.
Based on an average price of $73.06 per barrel for Nigeria’s Bonny Light crude, data obtained from the Central Bank of Nigeria (CBN) show that the production deficit translates to about $6.85 billion in lost revenue. However, when measured against the 2025 budget benchmark of $75 per barrel, the shortfall rises to approximately $7.03 billion.
Figures from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) indicate that total crude oil and condensate output for the eight-month period stood at 406.84 million barrels, representing an 18.27 percent shortfall against the 500.58 million barrels projected in the national budget. The 2025 budget was predicated on a daily crude oil production target of 2.06 million barrels per day, but NUPRC data show that actual output averaged 1.673 million barrels per day during the period, indicating an average shortfall of about 390,000 barrels daily. If the trend persists through the remaining four months of the year, the country risks losing an additional 47.58 million barrels, valued at roughly $3.56 billion.
A breakdown of NUPRC’s data shows that the country missed its production target by 35.01 million barrels in the first quarter of 2025, amounting to a market value of $2.625 billion. The shortfall continued in the second quarter with a total of 34.67 million barrels in production losses valued at $2.592 billion. The third quarter has also maintained the same trend as July data showed a deficit of 10.78 million barrels valued at $808.5 million, while in August the figure rose to 13.28 million barrels valued at $996 million.
The Commission, in its August 2025 report to the Federation Account Allocation Committee (FAAC), disclosed a revenue shortfall of N459.6 billion against its August 2025 budgetary target of N1.2 trillion, after remitting only N745 billion. The revenue remittance for July was N723.17 billion, bringing the total shortfall for the two months to N941.23 billion. Although the report noted that total collections increased by N22.04 billion, equivalent to 3.05 percent when compared with July 2025, the improvement was attributed to a revenue drive that led to increased collection in almost all revenue heads. The underperformance, however, was largely driven by poor royalty inflows from oil and gas. While the monthly budget projected N1.144 trillion from royalties, only N682.28 billion was realised in August, leaving a gap of N461.89 billion.
So far, NUPRC said it has transferred N5.475 trillion through the Central Bank of Nigeria to the Federation Account between January and August 2025, instead of the N8.433 trillion expected from the sector. It added that the Commission’s performance from January to August 2025 is N7.103 trillion, inclusive of NNPC Limited JV and PSC royalty receivables of N1.050 trillion for the period, as well as Project Gazelle receipts of N730.24 billion for November 2024 (received in January 2025), and from January, March to June 2025.
Despite the government’s optimism, oil theft, pipeline vandalism, and lack of investment by oil companies have been blamed for the industry’s inability to meet the government’s production targets for the year. Experts who spoke to Financial Vanguard were also pessimistic about the capacity of the industry to significantly improve production before the end of the year.
Engr. Joe Nwakwue, Partner at Zera Advisory, said it is most unlikely for the government to achieve the projections on price and production volumes. He stated, “It’s certainly a stretch. Most unlikely, we would achieve both volume and price targets going by current trends. However, there has been a significant uptick in non-oil revenue generation. I hope these improvements will address the shortfall in oil revenue. Volume growth takes time and resources, and resources take time to mobilize.”
On his part, the Chief Executive Officer of AHA Consultancies, Mr. Henry Adigun, explained that while the country has the potential to produce two million barrels of oil per day, this was not possible in the short term. Adigun stated that the government makes the same mistake every year when making projections by placing a target that is unlikely to be achieved. “Every year they make false assumptions and projections that are unrealistic. This, at the end of the day, leads to poor budget performance because they don’t have the fundamentals correctly. What we expect them to use are figures that are realistic. It has become normal for us to overestimate the barrels that we produce and then we have to borrow money to finance the budget. They rely on false projections that are unrealistic and that are not based on any facts and figures,” he said.
However, speaking on production targets at the weekend, the Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, insisted that raising production to two million barrels per day was achievable before the end of the year. Lokpobiri admitted that access to finance has hindered investment in the upstream sector, especially for Nigerian companies, but stated that this was being addressed at the continental level with the establishment of the $5 billion Africa Energy Bank to be hosted in Nigeria. He said, “We have discovered that the biggest challenge we have in Africa is access to finance, and that is why we have come up with the African Energy Bank, which is ready to go. Nigeria, as the host country, has met its obligations. We have met all our obligations, legal and financial, and we are waiting for the bank to take off, which I think will take off any moment from now. Once that is done, our target is to change the game so that we can mobilize local finances to invest in that bank, targeted at creating the best value that we can get for our own people.”
Also speaking, the Commission Chief Executive of NUPRC, Engr. Gbenga Komolafe, said the national target is to reach 2.5 million barrels per day oil production. He disclosed that the Commission has so far approved 38 field development plans that have attracted $19.43 billion in investment. According to him, “Since the inception of the Commission, crude oil production has increased with the current average daily production of 1.65 million barrels per day expected to increase further with the Project 1mbpd initiative, which is aimed at achieving 2.5 million barrels per day in 2027 compared to NUPRC commencement.”
