Nigeria underperformed its 2025 budget crude oil production target in the first half of 2025 by over 70 million barrels or about 19 per cent, a shortfall that may compound the federal government’s fiscal challenges and undermine key economic projections for the year.
Data obtained from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) showed that the country pumped a total of 303,194,677 barrels of crude and condensates from January to June 2025.
THISDAY’s checks indicated that this figure fell significantly below the government’s projected benchmark of 2.06 million barrels per day, which would have yielded approximately 373.86 million barrels over the same period.
The actual shortfall of about 70.67 million barrels, based solely on crude and condensate production, does not take into account possible additional losses from shut-ins, theft, sabotage, or deferred output due to operational setbacks.
A detailed breakdown from the NUPRC data showed that Nigeria produced 53,861,877 barrels in January; 46,824,697 barrels in February; 49,717,065 barrels in March; 50,499,206 barrels in April; 51,380,475 barrels in May; and 50,911,357 barrels in June.
On the average, the country produced about 1.67 million barrels per day during the six-month period, well below the budget assumption of 2.06 million barrels per day budget benchmark for the period.
Although the federal government has said that there’s no cause for concern, the underperformance has recently sparked concerns across economic and policy circles, as crude oil earnings remain the bedrock of Nigeria’s foreign exchange inflow and government revenues, even in an era of expanding focus on non-oil sources.
Using a conservative average Brent crude price of $72 per barrel for the period, Nigeria’s estimated revenue loss from the H1 2025 production shortfall of about 70.67 million barrels, that is, covering January to June was approximately $5.09 billion, based on the volume gap alone.
The actual impact could be even larger when fiscal oil terms, crude differentials, and production sharing contracts are factored in. While the federal government had banked on increased output to drive key infrastructure spending and fund critical budgetary items, the shortfall risks putting pressure on external borrowing, the value of the naira, and debt servicing capabilities.
The International Monetary Fund (IMF) earlier in the month raised concerns over the issue, saying that it expects the gulf between this year’s budgetary spending and revenue of Africa’s biggest oil producer to widen further in the face of geopolitical threats to the prices of crude, which contributes around two-thirds of government income.
“Downside risks have increased with heightened global uncertainty,” the Fund stated in its periodic review of economic developments in the country. “A further decline in oil prices or increase in financing costs would adversely affect growth, fiscal and external positions, undermine financial stability and exacerbate exchange rate pressures,” the IMF added in the document titled “Nigeria: 2025 Article IV Consultation.”
It alerted authorities to the danger that Nigeria’s financing needs and fiscal position may vary from forecasts, should the government fail to revise the budget and announce new targets for its spending plan.
In the same vein, Nigeria only struggled to meet its Organisation of Petroleum Exporting Countries (OPEC) quota this June, having consistently failed to do so for a long time, specifically since January when it temporarily achieved the feat.
In January it produced 1.53 million bpd; 1.46 million bpd in February; 1.4 million bpd in March; 1.48 million bpd in April; 1.45 million bpd in May before it finally touched the 1.5 million bpd this June. While OPEC does not calculate condensate, Nigeria adds it to its targeted oil output yearly.
Adding to these worries, the World Bank recently warned that Nigeria faces a growing risk of a widening budget deficit if oil production continues to underperform.
In May, the World Bank described Nigeria’s 2025 federal budget as overly ambitious, warning that the federal government may be forced to turn to the Central Bank of Nigeria’s Ways and Means facility to finance likely revenue shortfalls.
Giving the warning during the public presentation of its Nigeria Development Update report titled ‘Building Momentum for Inclusive Growth’ in Abuja, the Bank said that despite strong revenue gains recorded in 2024, Nigeria’s 2025 budget assumptions remain optimistic and may prove difficult to meet.
He said, “It’s a very ambitious budget. Even with the very positive revenue sort of tailwind that we have… even considering that, it looks like it’s going to be pretty hard to meet some of the ambitious revenue targets that are in there,” the Bank added.
The concerns are not without precedent. In recent years, Nigeria has repeatedly missed oil output benchmarks, leading to sharp revisions in its Medium-Term Expenditure Framework (MTEF). In 2022, for example, Nigeria’s actual crude production dropped to multi-decade lows, dipping below 1 million barrels per day in some months due to theft and pipeline shutdowns.
Several factors continue to undermine Nigeria’s ability to meet production benchmarks. Chief among them are insecurity and oil theft in the Niger Delta region, which has led to persistent pipeline vandalism and production shut-ins; aging infrastructure and delays in finalising repairs on key crude evacuation routes.
President Bola Tinubu signed the 2025 Appropriation Act into law, approving a record budget of N54.99 trillion, the highest in Nigeria’s history. The budget was raised from the initial proposal of N49.7 trillion submitted to the National Assembly.
