Nigeria’s Petroleum Earnings Fall By 53.4%

The Central Bank of Nigeria has said that the country suffered a 53.4% fall in its petroleum earnings to N251.86 billion in November 2022, as against the N540.31 billion recorded in the previous month.

The CBN, in its latest monthly economic report for November 2022 released recently, blamed the decline on lower-than-expected earnings from petroleum profit tax and royalties.

It also attributed the sharp drop to the accounting effect of the treatment of crude oil and gas inflows as operational components of the Nigerian National Petroleum Company (NNPC) Limited under the Petroleum Industry Act (PIA) 2021.

However, the CBN noted that November 2022 oil receipts were 7.6 per cent lower than the N234.07 billion recorded in the month of 2021.

Giving a breakdown of oil earnings in November 2022, the CBN stated that the country recorded zero earnings from crude oil and gas exports, the same as in the previous months, while petroleum profit tax (PPT) and royalties stood at N245.02 billion compared with N535.5 billion recorded in October 2022 and N143.38 billion in November 2021.

The country, according to the bank, recorded zero earnings from domestic crude oil and gas sales in the month under review, the same as in the previous month, while other oil revenue stood at N6.84 billion in the month under review, compared with N4.81 billion and N9.33 billion in October 2022 and November 2021 respectively.

The CBN reported that the country recorded a trade deficit in November 2022 due to lower crude oil export receipts, following the decline in crude oil prices at the international market.

It added that merchandise imports also decreased due to a reduction in the importation of petroleum products, while an improvement was recorded in foreign capital inflow into the economy, driven by an improvement in portfolio inflow, owing to competitive yields on fixed-income securities.

The CBN said: “Crude oil and gas export receipts declined, due to weaker demand, amid recessionary fears in developed countries and COVID-19 restrictions in China, leading to lower crude oil prices. Crude oil and gas export receipts declined to $3.90 billion from $4.30 billion in October. A breakdown reveals that crude oil export receipts fell by 9.0 per cent to $3.30 billion, from USS$3.65 billion in the preceding month.

“The decrease was driven by the fall in the price of Nigeria’s reference crude, the Bonny Light, by 3.3 per cent to an average of $93.36 per barrel, relative to $96.57 per barrel in October. Similarly, gas export receipts declined by 6.0 per cent to $0.60 billion from $0.64 billion in October. In terms of share in total export, crude oil and gas accounted for 90.2 per cent. Of the total crude oil and gas export, oil constitutes 84.6 per cent, while gas accounts for 15.4 per cent.”