2017 Budget: Net Oil Revenue Dropped by N401bn in Q3

The actual net oil revenue into the Federation Account in the third quarter (Q3) of 2017 stood at 692.40 billion, indicating a drop of 401.51 billion or 36.7 per cent decline in the quarterly estimated budget of 1.093 trillion, the draft third quarter 2017 Budget implementation report has shown.

Despite the decline, the net oil revenue inflow in Q3 quarter of 2017 was still higher than the net revenue of 456.89 billion reported in the second quarter of 2017 by 235.51 billion (or 51.55 per cent).

According to the report released by the Budget Office of the Federation (BoF), the poor oil revenue performance in the third quarter of 2017, when compared with the quarterly projection, could be attributed to supply challenges as some of the facilities affected by crude oil theft, illegal bunkering and destruction of pipe lines remained inactive.

A total of 2.858.31 trillion was collected as gross oil revenue during the three quarter soft he year period as against the 4.000.84 trillion projected for the same period.

This depicts a shortfall of 1.142.52 trillion or 28.56 per cent drop below the three-quarter of the year projection but 816.98 billion( or 40.02 percent) above the 2.041.33 trillion realised within the same period of 2016.

A breakdown of the revenue by sub-head indicated that only crude oil sales of 1.547 trillion and other oil and gas revenue of 11.82 billion surpassed their three-quarter of the year projections of 1.262.47 trillion and 4.39 trillion by 284.75 billion (or 22.55 percent) and 7.42 billion( or 169.03 per cent) respectively.

The performance of crude oil sales reflects the gains of oil price over its 2017 budget benchmark. All other remaining oil revenue items fell below their respective three-quarter of the year projections.

Gas Sales of 160.38 billion, Royalties (Oil & Gas) of 348.90 billion, Rent of 0.24 billion, Gas Fla red Penalty of 3.39 billion and Petroleum Profit & Gas Taxes of 786.37 billion fell below their three-quarter of the year estimates of 408.35 billion, 674.87 billion, 1.26 billion, 3.55 billion and 936.62 billion by 247.97 billion (or 60.72 per cent), 325.97 billion (or 48.3 per cent), 1.02 billion (or 80.73 percent ),0.16 billion( or 4.42 per cent) and 150.25 billion (or 16.04 per cent) respectively.

On the other hand, Licenses and Early License Renewal yielded nothing in the three quarter of the year period.

The low performances were attributed to the dynamics in the price and demand of oil at the international market during the period.