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Nigeria’s Crude Oil Export Drops by 1.6m Barrels in May

Nigeria’s crude oil export fell by 1.6 million barrels in May, representing a 6.8 per cent decline from data for April export, according to figures obtained from the Central Bank of Nigeria (CBN).

The CBN, in its economic report for May, put oil export for the period at 1.37 million barrels per day (mbd) or a cumulative of 42.5 million barrels, as against 1.47 mbd or 44.1 recorded the preceding month,

The allocation of crude oil for domestic consumption was 0.45 mbd or 13.5 million barrels in the review month, according to the report obtained yesterday.

In addition, Nigeria’s crude oil production, including condensates and natural gas liquids, was 1.82 mbd or 56.4 million barrels (mb) in the reviewed month. This also represented a decline of 0.01 mbd or 5.2 per cent compared with 1.92 mbd or 57.6 million barrels (mb) produced in the preceding month.

The average spot price of Nigeria’s reference crude oil, the Bonny Light (37° API) rose to $73.70 per barrel in the reviewed period, compared with $73.03 per barrel recorded in April 2019.

This represented an increase of 0.9 per cent, in contrast to the level in the preceding month.

The rise in crude oil price was attributed largely to the growing tensions across the Middle- East, which threatened crude oil supply; escalating trade war between the US and China; supply losses from Venezuela, Libya and Iran and compliance with supply-cut pact by most OPEC member countries. The UK Brent at $72.05/b and the Forcados at U $73.90/b exhibited similar trend as the Bonny Light, while the price of WTI at  $58.32/b declined by 3.8 per cent in the review month.

Also, average OPEC basket of 15 selected crude streams was  $70.01/b in May 2019. This showed a decline of 0.8 per cent and 5.5 per cent, compared with the  $70.59/b and  $74.09/b recorded in the preceding month and the corresponding period of 2018, respectively.

Owing to this, federally collected gross revenue stood at N733.82 billion in May, which was lower than the provisional monthly budget estimate of N1.107 trillion by 33.7 per cent.

Similarly, it fell below the receipts in the preceding month by 7.7 per cent. The decline in federally-collected revenue (gross) relative to the monthly budget estimate was attributed to the shortfall in receipts from oil revenue during the reviewed period.

“Gross oil receipts, at N410.18 billion or 55.9 per cent of the total revenue, was below both the monthly budget of N640.21 billion by 35.9 per cent and the preceding month’s receipts of N472.38 billion by 13.2 per cent, respectively.

“The decline in oil revenue relative to the provisional monthly budget estimate was attributed to shut-ins and short-downs at some NNPC terminals due to pipeline leakages and maintenance activities,” the CBN report stated.

Also, non-oil revenue, at N323.64 billion or 44.1 per cent of the total revenue, fell below the provisional monthly budget estimate of N466.91 billion by 30.7 per cent. It, however, exceeded the preceding month’s receipt of N322.93 billion by 0.2 per cent. “The lower non-oil revenue relative to the provisional monthly budget was due to the shortfalls in receipts from all the non-oil revenue components, except Customs and Excise Duties.

“Of the total N667.29 billion retained revenue in the Federation Account, the sums of N92.63 billion, N48.76 billion and N24.73 billion were transferred to the VAT Pool Account, the Federal Government Independent revenue and “Others”, respectively, leaving a net balance of N501.18 billion for distribution to the three tiers of government,” it said.

Of the amount, the federal government received N239.65 billion, while the state and local governments received N121.56 billion and N93.71 billion, respectively. The balance of N46.26 billion was shared among the oil producing states as 13 per cent Derivation Fund.

Similarly, from the N92.63 billion transferred to the VAT Pool Account, the federal government received N13.89 billion, while the state and local governments received N46.31 billion and N32.42 billion, respectively.

In addition, N0.81 billion was distributed in the month as exchange gain with the federal, state and local governments receiving N0.39 billion, N0.19 billion and N0.14 billion, respectively, while the 13 per cent Derivation Fund received N0.10 billion.

Overall, total allocation to the three tiers of government in May amounted to N594.62 billion, according to the report.

This, it stated, was below the provisional monthly budget estimate of N923.39 billion by 36.4 per cent and below the preceding month’s allocation of N602.41 billion, by 1.3 per cent.

“Total non-oil export earnings, at  $396.62 million, indicated a decline of 16.3 per cent and 23.9 per cent, compared with the levels in April 2019 and the corresponding period of 2018, respectively.

“The fall in earnings from non-oil exports in May 2019 was due to 46.1per cent, 41.0 per cent, and 10.8 per cent decrease in the proceeds from food products, agricultural and minerals sub-sectors, to $19.76 million,  $85.47 million, and $186.59 million, respectively.

However, export receipts from the industrial sector, manufacturing and transport rose to  $48.28 million,  $56.49 million and US$0.02 million, respectively,” it added.