Nigeria lost a whopping $4.8 billion, or N769. 26 billion, in the first quarter of this year, as the country's crude oil production dropped by 43.92 million barrels during the period, thus missing the 2014 budget estimate by 20.4 per cent.
According to data obtained from the Central Bank of Nigeria, (CBN) Economic Report for the first quarter 2014, Nigeria's crude oil production, including condensates and natural gas liquids, stood at an average of 1.90 mbpd in the first quarter of 2014, bringing to a total of 171.0 million barrels during the period. This indicated a shortfall of 0.48 mbpd from the budget estimate.
The federal government last month signed the 2014 budget with reduction of the crude oil production estimate to 2.38 million barrels per day (mbpd) down from to the 2.55 mbpd, used in the previous year's budget.
If the current trend persists, the revised estimate would prove difficult target to meet.
The lower production output also reflected on the federal government's revenue for the period.
Available data showed that total federally-collected revenue during the first quarter of 2014 stood at N2.4 trillion, representing a shortfall of 11.76 per cent compared to the projected revenue of N2.72 trillion for the first quarter, as projected in the 2014 budget.
At N1,808.86 billion, gross oil receipts, which constituted 74.9 per cent of the total, fell by 6.5 per cent below the proportionate budget estimate, but rose by 17.6 per cent above the receipts in the
preceding quarter. The development was attributed to the increase in crude oil and gas exports, and other oil revenues during the review quarter.
Non-oil receipts (gross), at N605.6 billion (25.1 per cent of the total), was below both the proportionate budget estimate and the level in the fourth quarter of 2013 by 32.8 and 9.1 per cent, respectively.
The decline in non-oil revenue relative to the fourth quarter of 2013 was due to the fall in receipts from customs and excise duties, VAT and education tax.
At N823.86 billion, the Federal Government retained revenue for the first quarter of 2014 was lower than both the proportionate budget estimate and the receipts in the fourth quarter of 2013 by 32.8 and 0.3 per cent, respectively. Of this amount, the Federal Government share from the Federation Account, Sure-P, FGN Independent Revenue, and VAT were N703.72 billion, N48.88 billion, N40.48 billion and N30.79 billion, respectively.
In addition, the sum of N22.85 billion from NNPC Refund was shared by the sub-national governments and 13 per cent Derivation Fund as follows: State Governments (N11.23 billion), Local Governments (N8.65 billion) and 13 per cent Derivation Fund (N2.97 billion). Thus, the total allocation to the three tiers of government in the first quarter of 2014 amounted to N1,827.73 billion, compared with N2,008.12 billion in the preceding quarter.
Of the federally-collected gross revenue during the review quarter, the sum of N1,492.99 billion (after accounting for all deductions and transfers) was transferred to the Federation Account for distribution among the three tiers of government and the 13.0 per cent Derivation Fund. The Federal Government received N703.72 billion, while the state and local governments received N356.93 billion and N275.18 billion, respectively. The balance of N157.15 billion went to the 13.0% Derivation Fund for distribution to the oil-producing states. Also, the Federal Government received N30.79 billion from the VAT Pool Account, while the state and local governments received N102.63 billion and N71.84 billion, respectively.
The sum of N106.65 billion was also distributed as the Subsidy Re-Investment and Empowerment Programme (SURE-P) among the three tiers of government and the 13 per cent Derivation Fund as follows: Federal Government (N48.88 billion), State Governments (N24.80 billion), Local Governments (N19.11 billion) and 13 per cent Derivation Fund (N13.86 billion).
However, the first quarter output marked a slight increase over the 1.87 mbpd or (172.04 million barrels) in the fourth quarter of 2013, representing an increase of 0.03 mbd or 1.6 per cent above the level in the fourth quarter of 2013. Consequently, crude oil export was estimated at 1.45 mbd or (130.50 million barrels) in the review quarter, compared with 1.42 mbd or 130.64 in the fourth quarter of 2013, thus representing an increase of 2.1 per cent.
At an estimated average of US$109.47 per barrel, the price of Nigeria‟s reference crude, the Bonny Light (37º API), fell by 3.2 per cent below the level in the fourth quarter of 2013. The average prices of other competing crudes, namely the U.K. Brent, the West Texas Intermediate and the Forcados also fell to US$107.35, US$92.86 and US$110.33 per barrel from US$110.81, US$97.73 and US$112.74 per barrel, respectively, in the preceding quarter. At US$105.98 per barrel, the average price of OPEC‟s basket of eleven crude streams fell by 1.6 and 0.8 per cent, below the US$107.67 and US$106.79 per barrel recorded in the fourth and the corresponding quarters of 2013, respectively. The fall in prices was attributed to the continued geopolitical tension in Ukraine, China's slow economic growth and the ongoing production outage in Libya.