FG rakes N5.55trn from crude oil in 2018 – CBN

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CBN

By Kayode Tokede

The Federal government’s total revenue from crude oil rose by 34.9 per cent to N5.55 trillion in 2018, reflecting impact of increase in production and crude oil price.

The revenue from Crude oil represents 54.7 per cent of the total federation revenue which closed 2018 at N9.4 trillion.

This was revealed by the Central Bank of Nigeria (CBN) in its Economic Report for the fourth quarter of 2018 on Friday.

Findings by our correspondent revealed that FG in 2017 generated N4.1 trillion from Crude oil.

The report by CBN also disclosed that FG generated N3.89 trillion from Non-Oil sector in 2018.

According to the CBN’s report, Gross oil receipt, at N1,465.31 billion or 60.7 per cent of the total revenue, was below the proportionate quarterly budget estimate by 23.7 per cent, but higher than receipts in the third quarter of 2018 by 5.1 per cent.

“Despite the increase in crude oil price, oil revenue declined relative to the proportionate budget owing to shortfalls in crude oil production and exports, arising from maintenance at various NNPC terminals.

“Non-oil revenue, at N946.90 billion or 67.6 per cent of the total, was below the proportionate quarterly budget estimate of N1,400.74 billion and the level in the preceding quarter by 32.4 per cent and 17.0 per cent, respectively.

“The lower non-oil revenue relative to the proportionate quarterly budget estimate was due to the shortfalls in receipts from FG Independent Revenue and VAT in the review period.

The report explained further that, “After statutory deductions and transfer of N288.34 billion and N392.33 billion, respectively, a net sum of N1,731.54 billion was retained in the Federation account and shared among the three ties of government. Of this amount, the Federal Government received N828.66 billion, while State and Local governments received N420.31 billion and N324.04 billion, respectively. The balance of N158.54 billion was transferred to the 13 per cent Derivation Fund for distribution among the oil prodcuing states.

“In addition, the Federal Government received N39.80 billion, while the State and Local governments received N132.67 billion and N92.87 billion, respectively, from the VAT Pool Account.”

The apex bank report stated that Nigeria’s crude oil production, including condensates and natural gas liquids, averaged 1.86 mbd or 171.12 million barrels (mb) during the review quarter. This represents an increase of 2.2 per cent, compared with 1.82 mbd or 167.44 million barrels at the end of the third quarter of 2018.

“The estimated increase in production was attributed largely to gains from sustained partnership with government and stakeholders in the Niger-Delta region and the security measures put in place to forestall production disruption and losses through pipeline vandalism.

“Crude oil export averaged 1.41 mbd or 129.7 mb, representing an increase of 2.9 per cent above 1.37 mbd or 126.0 mb in the preceding quarter. Allocation of crude oil for domestic consumption was 0.45 mbd or 41.4 million barrels during the period under review.

“The average spot price of Nigeria’s reference crude oil, the Bonny Light (37° API), fell to US$69.89/b in the fourth quarter 2018, from $76.50/b in the preceding quarter. This represented quarter-on-quarter decrease of 8.6 per cent. The fall in oil price was attributed mainly, to supply glut in the global market, particularly rising U.S. crude oil inventories.

“The UK Brent at $68.41/b, WTI at $53.59/b and the Forcados at $69.96/b exhibited similar trend as the Bonny Light.

“The average price of OPEC basket of 15 selected crude streams was $67.98 per barrel in the fourth quarter of 2018. This represents a decrease of 8.3 per cent below the level in the preceding quarter but an increase of 14.5 per cent above the level in the corresponding period of 2017.”

The report explains that favourable international price and increased domestic production of crude oil strengthened the external sector in the fourth quarter of 2018.

“Consequently, aggregate foreign exchange inflow through the CBN amounted to $14.51 billion, and indicated 12.3 per cent and 1.3 per cent increase over the levels in the preceding quarter and the corresponding period of 2017, respectively.

“The increase reflected the rise in both oil and non-oil receipts, including proceeds from government debts, TSA, third party receipts, interest on reserves and investments, unutilised funds from foreign exchange transactions, unutilised IMTO funds and other official receipts.

“Aggregate outflow through the CBN, fell to $14.60 billion, from $16.94 billion in the fourth quarter of 2018, but increased above the $8.38 billion recorded in the corresponding period of 2017. The decline in outflow relative to the preceding quarter, reflected the fall in inter-bank utilisation, external debt service, forex special payment and SDR charges.

“Overall, a net outflow of $0.09 billion was recorded through the Bank, compared with $4.02 billion in the preceding quarter and a net inflow of $5.94 billion in the corresponding period of 2017, respectively,” the report added.

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