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Crude oil revenue drops by N208bn

By on February 3, 2014

The Federal Government earned the sum of N1tn from crude oil sales within three months, an investigation has shown.

The N1tn net oil revenue that accrued to the Federation Account between July and September 2013 indicated a shortfall of N208.47bn or 17.18 per cent below the projected quarterly estimate of N1.213tn.

The figures are contained in the Budget Monitoring and Evaluation Report for the third quarter of 2013 released by the Federal Ministry of Finance.

The report, prepared by the Budget Office of the Federation, was obtained by our correspondent on Friday.

It is the latest report on the performance of the 2013 fiscal policy as the fourth quarter report has yet to be compiled by the agency.

The Federation Account has in recent times witnessed massive decline in the federally collected revenue owing to disruptions to production and lifting operations due to maintenance, vandalism of pipelines, crude oil theft and force majeure declared by oil companies.

This, according to experts, calls for concern as accrual to external reserves has remained low while much of the previous savings have been depleted, thereby undermining the ability of the Central Bank of Nigeria to sustain the exchange rate stability.

The Governor of the CBN confirmed the massive decline in oil revenue when he said, “As the inflow begins to slow down, we need to be able to stop the theft, vandalism, leakages and basically save our own money in order to build up reserves.

“We need to tighten control; we need to check where the money is going. It will be tough for us; it will be tough for fiscal authorities and elections are coming up in 2015.”

The budget monitoring report showed the net oil revenue in the third quarter of last year was lower than the N1.091tn net oil revenue recorded in the second quarter of the same year by N85.75bn (or 7.86 per cent).

It stated, “In the third quarter of 2013, the actual net oil revenue that accrued into the Federation Account was N1.0tn, indicating a shortfall of N208.47bn (or 17.18 per cent) below the projected quarterly estimate of N1.213tn.

“Similarly, the net oil revenue in the third quarter was lower than the N1.091tn net oil revenue recorded in the second quarter by N85.75bn (or 7.86 per cent).

“In spite of the favourable oil prices at the international market, the less-than-projected performance of the net oil revenue in the third quarter of 2013 can be attributed to the fall in oil lifting figure during the period.”

The report indicated as of September 2013, the gross royalties (oil and gas) of N684.45bn,  gas flared penalty of N2.72bn and Petroleum Profit Tax of N2.159tn exceeded their respective projections of N570.81bn, N1.86bn and N1.772tn by N113.64bn (or 19.91 per cent), N860m (or 46.14 per cent) and N386.84bn (or 21.83per cent), in that order.

On the other hand, it showed the crude oil sales of N2.208tn, gas sales of N200.59bn, rent of N150m and other oil and gas revenue of N1.39bn fell below their corresponding projections of N3.182tn, N269.69bn, N660m and N2.3bn by N974.22bn (or 30.61 per cent), N69.1bn (or 25.62 per cent), N510m (or 76.91 per cent) and N920m (or 39.88 per cent), respectively.

On non-oil revenue performance, the report stated the outcome of different measures aimed at boosting revenue had led to the continued growth in targets and actual revenues from this sector of the economy.

It stated, “In the third quarter of 2013, the actual gross non-oil revenue of N766.93bn was received.

“This implies an increase of N54.01bn (or 7.58 per cent) above the quarterly estimate of N712.92bn.”

A breakdown of the non-oil revenue items showed that only Company Income Tax of N475.08bn was above its quarterly projected estimate of N248.01bn by N227.07bn (or 91.56 per cent).

“All others fell below their quarterly projected estimates. Value Added Tax of N194.41bn and Customs and Excise Duties of N97.44bn were below their quarterly estimates of N236.32bn and N198.24bn by N41.91bn (or 17.74 per cent) and N100.8bn (or 50.85 per cent), respectively.

“When compared to their respective second quarter outcomes, Value Added Tax, Company Income Tax and Customs and Excise Duties grew by N760m (or 0.39 per cent), N292.04bn (or 159.55 per cent) and N190m (or 0.19 per cent), respectively,” it added.

The report attributed the increase in performances of these non-oil revenue items in the period as against the second quarter to the rise in economic activities during the third quarter.

 

[Punch]