2017 Budget: Net Oil Revenue Dropped by N401bn in Q3

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Ndubuisi Francis in Abuja

The actual net oil revenue into the Federation Account in the third quarter (Q3) of 2017 stood at ₦692.40 billion, indicating a drop of ₦401.51 billion or 36.7 per cent decline in the quarterly estimated budget of ₦1.093 trillion, the draft third quarter 2017 Budget implementation report has shown.

Despite the decline, the net oil revenue inflow in Q3 quarter of 2017 was still higher than the net revenue of ₦456.89 billion reported in the second quarter of 2017 by ₦235.51 billion (or 51.55 per cent).

According to the report released by the Budget Office of the Federation (BoF), the poor oil revenue performance in the third quarter of 2017, when compared with the quarterly projection, could be attributed to supply challenges as some of the facilities affected by crude oil theft, illegal bunkering and destruction of pipelines remained inactive.

A total of ₦2.858.31 trillion was collected as gross oil revenue during the three quarters of the year period as against the ₦4.000.84 trillion projected for the same period.

This depicts a shortfall of ₦1.142.52 trillion or 28.56 per cent drop below the three-quarter of the year projection but ₦816.98 billion (or 40.02 per cent) above the ₦2.041.33 trillion realised within the same period of 2016.

A breakdown of the revenue by sub-head indicated that only crude oil sales of ₦1.547 trillion and other oil and gas revenue of ₦11.82 billion surpassed their three-quarter of the year projections of ₦1.262.47 trillion and ₦4.39 trillion by ₦284.75 billion (or 22.55 per cent) and ₦7.42 billion (or 169.03 per cent) respectively.

The performance of crude oil sales reflects the gains of oil price over its 2017 budget benchmark. All other remaining oil revenue items fell below their respective three-quarter of the year projections.

Gas Sales of ₦160.38 billion, Royalties (Oil & Gas) of ₦348.90 billion, Rent of ₦0.24 billion, Gas Flared Penalty of ₦3.39 billion and Petroleum Profit & Gas Taxes of ₦786.37 billion fell below their three-quarter of the year estimates of ₦408.35 billion, ₦674.87 billion, ₦1.26 billion, ₦3.55 billion and ₦936.62 billion by ₦247.97 billion (or 60.72 per cent), ₦325.97 billion (or 48.3 per cent), ₦1.02 billion (or 80.73 per cent), ₦0.16 billion (or 4.42 per cent) and ₦150.25 billion (or 16.04 per cent) respectively.

On the other hand, Licenses and Early License Renewal yielded nothing in the three quarter of the year period.

The low performances were attributed to the dynamics in the price and demand of oil at the international market during the period.

Meanwhile, the Minister of Finance, Mrs. Kemi Adeosun, has disclosed that the federal government is closing the 2017 Budget with a capital spend in excess of N1.5 trillion. The @2017 Budget has a capital component of N2.1 trillion.

Adeosun, who made the disclosure on her Twitter handle, had applauded the federal government’s debt management strategy for yielding the desired result.

She said: “I’m pleased to note that we’re going to close the 2017 Budget with capital spending in excess of N1.5tn, which is higher than what we achieved in the 2016 budget. We’re also looking forward to the passage of the 2018 budget by the National Assembly.”

Briefing State House reporters in Abuja after the Federal Executive Council (FEC) meeting on March 22, 2018, Adesoun had disclosed that a total capital vote of N1.248 trillion had been expended on projects, as at then.

She said “l gave details of the big four areas and then others. So, Power, Works and Housing got N301.89 billion, Defence 151.2 billion, Agriculture N119.9 billion, Transport N127.9 billion and other areas combined is N547.6 billion. The total capital budget release for 2017 so far is N1.248,310 trillion.

“We haven’t closed yet. We are confident we will close the year roughly around where we closed last year. We will close around N1.3 trillion mark; so, our commitment to infrastructure spending remains very strong,” she added.