Nigeria recorded an estimated ₦5.13 trillion windfall in oil revenue within two months, driven by a sharp rise in global crude prices בעקבות tensions linked to the United States–Iran crisis, pushing earnings far above the Federal Government’s 2026 budget projections, Dip Connects Online News reports.
The crisis, which began on February 28 when oil prices were below $70 per barrel, triggered a sustained rally in global crude markets. Prices climbed above $120 at some point, with Brent trading at $110 per barrel as of Friday, while Bonny Light stood at $134 per barrel.
The 2026 budget is based on a daily production target of 1.8 million barrels, a benchmark oil price of $64.85 per barrel, and an exchange rate of ₦1,400 to the dollar. This translates to an expected daily revenue of about $116.73 million, or approximately ₦163.42 billion.
However, actual earnings in March and April significantly exceeded these projections due to rising oil prices.
In March, Nigeria produced an average of 1.55 million barrels per day, with crude selling at $95.03 per barrel and an exchange rate of ₦1,370. This resulted in daily revenue of about $147.30 million, or ₦201.80 billion, creating a daily surplus of ₦38.38 billion. Over 31 days, the windfall for March was estimated at ₦1.19 trillion.
Despite production falling short of the budget target, higher prices ensured revenues surpassed expectations.
In April, both production and prices increased. Output rose to an estimated 1.7 million barrels per day, while the average price surged to $127.05 per barrel, with an exchange rate of ₦1,365. Daily revenue climbed to approximately $216 million, or ₦294.84 billion, generating a daily surplus of ₦131.42 billion. Over 30 days, April’s windfall was estimated at ₦3.94 trillion.
Combined, the windfall from both months reached ₦5.13 trillion, with March contributing ₦1.19 trillion and April accounting for ₦3.94 trillion.
Analysis shows that the surge in oil prices—not production growth—was the primary driver of increased revenue. Even with lower production levels, strong prices ensured higher earnings.
Without the price spike, revenues would have been significantly lower. For instance, if March crude had sold at the benchmark price of $64.85 per barrel, daily revenue would have dropped to ₦137.71 billion, while April earnings would have similarly declined.
While the government benefits from increased oil revenue, Nigerians are facing rising fuel costs. The Nigerian National Petroleum Company Limited recently raised the official selling prices of crude grades, with Bonny Light increasing by $6.13 per barrel and Forcados by $7.01.
This has had a direct impact on petrol prices. The Dangote Petroleum Refinery raised its gantry price to ₦1,275 per litre from ₦1,200, while pump prices at filling stations climbed to between ₦1,350 and ₦1,400 per litre.
Industry stakeholders have called on the government to provide relief. The National President of the Petroleum Products Retail Outlet Owners Association of Nigeria, Billy Gillis-Harry, urged authorities to channel part of the windfall into easing transportation and food costs.
He warned that petrol prices could exceed ₦1,500 per litre if the Middle East crisis persists.
Energy experts also described the situation as a “double-edged sword.” While higher oil prices boost government revenue, they also drive inflation and increase the cost of living.
Economist Adeola Adenikinju called for targeted cash transfers to support vulnerable Nigerians, noting that the absence of a reliable database remains a major challenge.
Meanwhile, local refiners have urged the government to adopt a domestic crude pricing model rather than relying on international benchmarks like Brent, arguing that the current system inflates costs.
Economist Bismarck Rewane suggested that the government could supply crude to local refineries at controlled prices in exchange for stable fuel prices.
The development highlights Nigeria’s continued dependence on global oil price movements. While the current surge provides short-term fiscal relief, it also exposes the economy’s vulnerability to external shocks, as any drop in global prices could significantly reduce revenue.
Ultimately, the oil windfall underscores both an opportunity for economic relief and a growing burden on citizens grappling with rising fuel costs and inflation.
ADEOLA KUNLE
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