By Obinna Uballa
Nigeria lost an estimated N1.76tn in potential crude oil revenue between January 2025 and January 2026 after repeatedly failing to meet its production quota set by the Organisation of the Petroleum Exporting Countries (OPEC), deepening the fiscal strain that has left ministries starved of capital funds.
Data from the Nigerian Upstream Petroleum Regulatory Commission showed that although Nigeria slightly exceeded its 1.5 million barrels per day quota in January, June and July 2025, output fell below target in nine months of 2025 and again in January 2026.
Across the period, cumulative shortfalls reached 18.12 million barrels. Using the average Bonny Light crude price of $72.08 per barrel – based on figures from the Central Bank of Nigeria – the production gap translates to about $1.31bn in lost revenue. At an exchange rate of N1,353 to the dollar, this amounts to roughly N1.76tn.
The largest deficit occurred in September 2025, when output dropped to 1.39 mbpd, leaving a daily shortfall of about 110,000 barrels. January 2026 production averaged 1.459 mbpd, extending the streak of missed targets to six consecutive months from August 2025.
Ironically, the losses came despite Nigeria producing about 530.41 million barrels in 2025, generating gross revenue estimated at N55.5tn at the same average price and exchange rate. Analysts cautioned, however, that this figure represents gross inflows and excludes production costs, joint venture obligations, cost recoveries and losses from oil theft.
Energy expert, Professor Emeritus Wumi Iledare, said the core problem was not oil prices but production inefficiencies. According to him, the government planned to produce 766.5 million barrels in 2025 but managed roughly 599.6 million barrels, leaving about 167 million barrels unrealised.
“Meeting oil production targets will depend far less on ambitious projections and far more on practical, on-the-ground actions,” Iledare said, urging improved security around oil assets, faster regulatory approvals and stronger investment in maintenance and infill drilling.
A professor of economics, Segun Ajibola, noted that crude output depends on technical partnerships, global market conditions and environmental factors, many of which are outside direct government control. He added that persistent controversies surrounding the Nigerian National Petroleum Company Limited had also complicated the operating environment.
Meanwhile, the new leadership of the NUPRC has pledged to ramp up production, aligning with President Bola Tinubu’s plan to raise crude output to two million barrels per day by 2027 and three million by 2030.
The oil revenue shortfall has compounded a wider fiscal squeeze that has crippled capital releases to Ministries, Departments and Agencies.
Federal Government revenue between January and July 2025 stood at N13.67tn, far below the pro rata target of N23.85tn. Oil revenue underperformed sharply, dragging down overall collections despite modest gains in Company Income Tax and VAT.
During the same period, only N834.80bn was released to MDAs for capital projects out of a pro rata capital budget of N10.81tn, less than 10 per cent performance. Total capital expenditure stood at N3.60tn, representing a 73.7 per cent shortfall relative to expectations.
The impact has been severe across key sectors. The Federal Ministry of Health and Social Welfare received just N36m out of its N218bn capital allocation for 2025, according to Minister Mohammed Pate. The Ministry of Transportation got about one per cent of its N256.73bn capital vote, while the Ministry of Marine and Blue Economy received N202m of its N3.53bn allocation. The Ministry of Women Affairs reported releases of only 0.44 per cent of its approved capital budget.
Lawmakers have openly criticised the Office of the Accountant-General of the Federation over zero or negligible capital disbursements and mounting contractor debts. Senators described the situation as “embarrassing and baffling,” questioning why, despite fuel subsidy removal and forex reforms, capital projects remain unfunded.
Accountant-General Shamseldeen Ogunjimi attributed the crisis to inadequate cash backing and indiscriminate contract awards by MDAs without confirmed funding. He noted that previous reliance on “Ways and Means” financing had been discontinued to safeguard macroeconomic stability.
Legislative consultant Akinloye Oyeniyi accused the Ministry of Finance of prioritising recurrent expenditure over capital spending to avoid unrest from unpaid salaries, arguing that withholding capital votes slows development but does not immediately disrupt government operations.
However, the Minister of Budget and Economic Planning, Abubakar Bagudu, rejected claims that the 2025 budget is in disarray. Speaking on ARISE NEWS, he said revenue pressures and capital shortfalls are not unusual in democratic systems, noting that even during periods of high oil prices, capital budget performance had historically lagged.
