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By Adewale Sanyaolu
Nigeria is currently facing one of its toughest economic periods due to its inability to meet some of its projected targets as outlined in the 2025 budget, a development already translating into weak implementation across many sectors. At the heart of the major setback is the inability of the country to hit its oil price budget benchmark of $75 per barrel and a daily oil production of 2.06 million barrels per day. These missed targets have further led to a slump in oil revenue. As of September 2025, the country has collected approximately N62.15 trillion in oil revenue, falling short of its target of N84.67 trillion.
To break it down further, the Federal Inland Revenue Service (FIRS) said it collected N302.5 billion in oil-related taxes in September, significantly lower than the monthly target of N600.16 billion, marking a 49.60 per cent shortfall.
Brent crude is currently around $62.56 per barrel, which is lower than the budgeted $75 per barrel. This decline is negatively impacting revenue.
The spiralling effect of these missed targets has placed Nigeria as the largest borrower in Africa and the third-biggest in the world, with the stock of World Bank International Development Association loans rising to $18.5 billion.
Latest data from the IDA’s unaudited financial statements for the third quarter of 2025 confirmed that the country has maintained the ranking it first attained in 2024, when it climbed to third place after overtaking India.
However, to ensure the budget does not fall flat on its face, the International Monetary Fund (IMF) recently advised Nigeria to recalibrate its 2025 budget to reflect lower oil prices, citing vulnerability to external shocks and potential strain on fiscal buffers.
On the other hand, the Nigerian Upstream Regulatory Commission (NUPRC) also reported a revenue drop of N3.21 billion due to reduced crude oil production and fluctuating global oil prices.
The country’s crude oil production has been a challenge, dropping to an average of 1.58 million barrels per day in September, below the OPEC quota of 1.5 million barrels per day, as a result of a three-day strike by senior oil workers and scheduled maintenance at key facilities.
The statement read, “Crude oil and condensate production for the month of September 2025 fell to an average of 1.581 million barrels per day, according to official statistics released by the Nigerian Upstream Petroleum Regulatory Commission on Saturday, October 11.”
Despite the setback, the data reflected a 1.61 per cent year-on-year increase compared to the 1.55 million bpd produced in September 2024, a sign of gradual improvement in the nation’s upstream sector.
However, on a month-on-month basis, production declined by 3.09 per cent from 1.63 million bpd in August 2025, indicating that the strike and maintenance activities took a short-term toll on output.
The NUPRC further noted that the average crude oil production level in September represented 93 per cent of Nigeria’s OPEC production quota of 1.5 million barrels per day. During the month under review, peak daily production of crude and condensate reached 1.81 million bpd, while the lowest output was 1.35 million bpd.
A breakdown of production by top streams showed that Forcados Blend led the chart with 15.86 per cent of total output, followed by Bonny Light with 13.31 per cent, Qua Iboe with 9.88 per cent, Escravos Light at 8.96 per cent, and Bonga Crude contributing 6.83 per cent.
Other key contributors included Agbami Condensate (4.94 per cent), Erha Crude (4.55 per cent), and Amenam Blend (4.2 per cent).
In August, Nigeria, Africa’s largest oil producer, met 96 per cent of its OPEC production targets following improved output levels with a daily average production of 1.63 million barrels.
However, while the modest year-on-year growth points to steady recovery, the month-on-month decline highlights the lingering fragility of the country’s oil production system, still prone to labour unrest, operational disruptions, and infrastructure bottlenecks.
The NUPRC has been implementing several initiatives, including stricter monitoring of production facilities, increased investment in field surveillance, and regulatory reforms, to stabilise crude output and restore Nigeria’s position within the global oil market.
To address the shortfall, Nigeria may need to explore alternative revenue sources, such as non-oil sectors, or adjust its budget assumptions.
The government has been advised to be more conservative in oil price forecasts to mitigate revenue shortfalls.
Minister of State for Petroleum Resources (Oil), Mr. Heineken Lokpobiri, recently said Nigeria will demand a higher oil production quota at the next meeting of OPEC scheduled for November 30. He said the country’s current quota, pegged at about 1.5 million barrels per day, no longer reflects its true production capacity.
