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Nigeria’s crude oil in free fall



THE Federal Government exported 140.79 million barrels or 1.53mbd of crude oil during the third quarter of 2014, according to the Central Bank of Nigeria (CBN) in its latest economic report.

This represents decline of the country’s essential commodity, which stood at 1.46 mbd or 131.4 million barrels.

According to the report, crude oil export stood at 1.53 mbd or 140.76 million barrels in the previous quarter, while deliveries to the refineries for domestic consumption remained at 0.45 mbd or 41.4 million barrels.

It added that the average price of Nigeria’s reference crude, the Bonny Light declined by 8.2 per cent below the level in the preceding quarter.

The apex bank disclosed that Nigeria’s crude oil production, including condensates and natural gas liquids, averaged at 1.98 million barrels per day (mbd) or 182.16 million barrels for the quarter.

The country’s crude oil receipts declined during the quarter under review due to the decline in crude oil prices at the international market.

It stated: “Total federally-collected revenue stood at N2,685.08 billion, representing an increase of 2.7 per cent above the receipts in the second quarter of 2014, but was a decline of 1.2 per cent below the proportionate quarterly budgeted estimate. At N1,723.11 billion, oil receipts, which constituted 64.2 per cent of the total, fell below the proportionate budget estimate and the level in the preceding quarter by 3.8 and 4.0 per cent, respectively. The fall in oil receipts was attributed, largely, to a decrease in crude oil and gas exports during the review quarter”.

The bank noted that non-oil receipts, at N961.98 billion, were higher than the budget estimate and the receipts in the preceding quarter by 3.7 and 17.6 per cent, respectively. Federal Government retained revenue was N924.67 billion, while total expenditure was N971.07 billion.

Thus the fiscal operations of the Federal Government resulted in an estimated deficit of N46.40 billion in the third quarter of 2014, compared with the quarterly budget and the preceding quarter’s deficit of N241.1 billion and N122.41 billion, respectively”.

At the global level, it stated the world crude oil demand in the third quarter increased by 2.1 per cent above the level recorded in the second quarter. “Similarly, world crude oil output also increased by 0.9 per cent over the level recorded in the preceding quarter”.

The reported explained: “Of the gross federally-collected revenue during the review quarter, the sum of N1,608.84 billion (net deductions and transfers) was transferred to the Federation Account for distribution among the three tiers of government and the 13 per cent Derivation Fund.

“The Federal Government received N765.56 billion, while the state and local governments received N388.30 billion and N299.36 billion, respectively. The balance of N155.62 billion went to the 13.0 per cent Derivation Fund for distribution among the oil-producing states. Also, the Federal Government received N27.85 billion from the VAT Pool Account, while the state and local governments received N92.83 billion and N64.98 billion, respectively”.

Guardian, January 15, 2015

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