Nigeria’s oil revenue reportedly surged above its 2026 benchmark by an estimated N5.13 trillion in March and April as global crude prices spiked amid Middle East tensions, but only a fraction of the windfall is reaching government coffers.
Since the war started, oil prices have continued to soar, selling for above $120 at some point. The 2026 budget is anchored on daily oil production of 1.8 million barrels per day, a benchmark oil price of $64.85 per barrel and an exchange rate of N1,400 to the Dollar.
The revenue surge followed a sharp rally in the global oil market after tensions between the United States and Iran disrupted supply expectations and drove crude prices far above Nigeria’s budget benchmark of $64.85 per barrel.
The calculation puts Nigeria’s expected daily oil revenue at about N163.42 billion.
However, actual earnings in March and April came in far above that level as global prices climbed, offsetting weaker production and delivering a strong fiscal boost to the federal government.
This does not translate to the entirety entering the country’s purse, because a large share of Nigeria’s crude is produced under Production Sharing Contracts (PSCs) and Joint Ventures (JVs) with international oil companies. Cost recovery and profit-sharing formulas mean only a fraction of incremental price gains accrues to the state after operators deduct capital and operating expenditures.
Beyond these, structural inefficiencies further limit actual inflows. Oil theft, pipeline vandalism, and persistent underproduction reduce the volume of crude available for sale, weakening revenue performance despite favourable prices. Additionally, before funds are distributed, multiple deductions, including operational costs, debt servicing obligations tied to oil-backed loans, and other statutory charges, are applied, shrinking what eventually reaches the Federation Account.
Nigeria also has to contend with exchange rate dynamics as Dollar-denominated earnings are subject to conversion challenges, further diluting the real fiscal impact in Naira terms.
Data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) showed that March crude production averaged 1.55 million barrels per day, below budget, but stronger oil prices lifted average daily revenue to about N201.8 billion, creating an estimated surplus of N1.19 trillion for the month.
In April, production improved to about 1.7 million barrels per day, while average crude prices climbed further, pushing daily revenue to about N294.84 billion and generating an additional N3.94 trillion above budget expectations.
Combined, both months delivered a revenue upside of N5.13 trillion, with the bulk of the gain driven by higher crude prices rather than stronger production performance.
The sharp rise in earnings has given the government short-term fiscal relief, but it has also exposed the economy’s continued dependence on external oil market shocks, where gains in public revenue often come with direct pressure on domestic energy costs.
That pressure is already showing in the downstream market, with refined fuel prices rising sharply as crude costs climbed. Gantry prices at Dangote Refinery rose to about N1,275 per litre, while petrol retail prices increased to between N1,310 and N1,400 per litre in several parts of the country.
The development has renewed concerns over inflation, transport costs and household spending, as higher crude prices continue to boost government earnings while increasing the cost of living for consumers.
