Nigeria loses N636bn revenue as crude oil production drops

Nigeria loses N636bn revenue as crude oil production drops

Nigeria’s oil production has been on a downward trend since January 2024, leading to a significant revenue loss of about N636.3 billion. According to data obtained from the Nigerian Upstream Petroleum Regulatory Commission, the country’s crude oil production dropped from 1.43 million barrels per day in January to 1.25mbpd in May.

The total volume of crude produced in January was 44.22 million barrels, which decreased to 38.8 million barrels in May, representing a plunge of 5.43 million barrels. The average cost of Brent crude oil, the global benchmark, increased marginally from $80.12 per barrel in January to $81.75 in May.

Meanwhile, the naira has been struggling against the US dollar, with an average exchange rate of N1,434.1 per dollar in May. Based on these figures, Nigeria lost an estimated N636.3 billion in revenue between January and May due to the decline in oil production.

The country’s oil production has been plagued by incessant vandalism of oil pipelines and crude oil theft, which has hindered efforts to increase output. Despite ongoing efforts to address the issue, the problem persists, with many calling for a special court to try culprits of oil theft and pipeline vandalism.

The Nigerian National Petroleum Company Limited has urged the judiciary to create a special court to try cases related to oil theft and pipeline vandalism or grant accelerated hearings for such cases. The company’s Group Chief Executive Officer, Mele Kyari, emphasized the importance of the judiciary’s role in addressing these issues, stating that it is critical for the success of efforts to tackle crude oil theft and pipeline vandalism.

Kyari also called on the judiciary to accelerate hearings on criminal cases related to oil theft and pipeline vandalism, emphasizing that timely determination of criminal charges and imposition of adequate punishments are necessary to deter would-be offenders.

The continued decline in Nigeria’s oil production has significant implications for the country’s economy, as it limits government revenue from oil exports and denies international oil companies major earnings. The Nigerian government has been working with relevant stakeholders to address these issues and ensure that the benefits of the country’s natural resources are maximized for economic and social development.

In addition to the economic implications, crude oil theft has also been a major obstacle to the operations of refineries in Nigeria, further exacerbating the problem. The government and industry stakeholders must work together to address these challenges and ensure that Nigeria’s oil sector is able to achieve its full potential.

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