Economy
Nigeria Suffers 53.4% Decline in Petroleum Earnings
By Adedapo Adesanya
The Central Bank of Nigeria (CBN) has disclosed that revenue from the petroleum sector dipped by 53.4 per cent to N251.86 billion in November 2022, as against the N540.31 billion recorded in the previous month.
The CBN, in its latest monthly economic report for November 2022 released recently, blamed the decline on lower-than-expected earnings from petroleum profit tax and royalties.
It also attributed the sharp drop to the accounting effect of the treatment of crude oil and gas inflows as operational components of the Nigerian National Petroleum Company (NNPC) Limited under the Petroleum Industry Act (PIA) 2021.
However, the CBN noted that November 2022 oil receipts were 7.6 per cent lower than the N234.07 billion recorded in the month of 2021.
Giving a breakdown of oil earnings in November 2022, the CBN stated that the country recorded zero earnings from crude oil and gas exports, the same as in the previous months, while petroleum profit tax (PPT) and royalties stood at N245.02 billion compared with N535.5 billion recorded in October 2022 and N143.38 billion in November 2021.
The country, according to the bank, recorded zero earnings from domestic crude oil and gas sales in the month under review, the same as in the previous month, while other oil revenue stood at N6.84 billion in the month under review, compared with N4.81 billion and N9.33 billion in October 2022 and November 2021 respectively.
The CBN reported that the country recorded a trade deficit in November 2022 due to lower crude oil export receipts, following the decline in crude oil prices at the international market.
It added that merchandise imports also decreased due to a reduction in the importation of petroleum products, while an improvement was recorded in foreign capital inflow into the economy, driven by an improvement in portfolio inflow, owing to competitive yields on fixed-income securities.
The CBN said: “Crude oil and gas export receipts declined, due to weaker demand, amid recessionary fears in developed countries and COVID-19 restrictions in China, leading to lower crude oil prices. Crude oil and gas export receipts declined to $3.90 billion from $4.30 billion in October. A breakdown reveals that crude oil export receipts fell by 9.0 per cent to $3.30 billion, from USS$3.65 billion in the preceding month.
“The decrease was driven by the fall in the price of Nigeria’s reference crude, the Bonny Light, by 3.3 per cent to an average of $93.36 per barrel, relative to $96.57 per barrel in October. Similarly, gas export receipts declined by 6.0 per cent to $0.60 billion from $0.64 billion in October. In terms of share in total export, crude oil and gas accounted for 90.2 per cent. Of the total crude oil and gas export, oil constitutes 84.6 per cent, while gas accounts for 15.4 per cent.”
By Aduragbemi Omiyale
On Tuesday, December 17, 2024, President Bola Tinubu will present the 2025 budget to a joint session of the National Assembly.
The size of the 2025 Appropriation Bill is about N47.9 trillion and would be presented to the parliament for approval.
Speaking at the plenary on Thursday, December 12, 2024, the President of the Senate, Mr Godswill Akpabio, said the presentation by Mr Tinubu would be at the chamber of the House of Representatives.
However, it is not certain if the lawmakers will pass the budget before December 31 to allow for a recent budget cycle of January to December.
Recall that on December 3, the senate approved the Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP) for 2025 to 2027.
This was after the President presented this the National Assembly on November 19 ahead of the consideration of the 2025 budget proposal.
In the MTEF/FSP, the government said it planned to borrow about N9.22 trillion from local and foreign sources to finance the budget deficit.
It pegged the crude oil benchmark at $75 per barrel and a daily oil production of 2.06 million barrels at an exchange rate of N1,400 to $1, and a targeted gross domestic product (GDP) growth rate of 6.4 percent.
At the plenary today, Mr Akpabio informed his colleagues that, “The President has made his intention known to the National Assembly to present the 2025 budget to the joint session of the National Assembly on December 17, 2024.”
By Adedapo Adesanya
Nigeria added 150,000 barrels per day to its crude production in November 2024 as it continues to pursue an ambitious 2 million barrels per day target.
According to the Organisation of the Petroleum Exporting Countries (OPEC), Nigeria’s oil production rose to 1.48 million barrels per day in November, up from 1.33 million barrels per day the previous month.
In its Monthly Oil Market Report (MOMR), OPEC revealed that at 1.48 million barrels per day, it is the continent’s leading oil producer, surpassing Algeria’s 908,000 barrels per day and Congo’s 268,000 barrels per day.
Business Post reports that OPEC doesn’t account for condensates, which Nigeria’s accounts for in its broader 2 million barrels per day target.
Despite the surge in production levels, Nigeria is still under producing its 1.5 million barrels per day output quota under a deal involving OPEC and 10 other producers known as OPEC+.
OPEC said it relied on primary data gotten through direct communication, noting that secondary sources reported 1.417 million barrels per day as Nigeria’s crude production in November — up from 1.4 million barrels per day in October.
The data also shows that OPEC’s total oil production among its 12 members rose by 104,000 barrels per day in the month under review.
According to secondary sources, the total of the 12 OPEC countries’ crude oil production averaged 26.66 million barrels per day in November 2024.
“Crude oil output increased mainly in Libya, Iran, and Nigeria, while production in Iraq, Venezuela, and Kuwait decreased”, OPEC said.
“At the same time, total non-OPEC DoC crude oil production averaged 14.01 mb/d in November 2024, which is 219 tb/d higher, m-o-m. Crude oil output increased mainly in Kazakhstan and Malaysia,” the organisation added.
In a related development, OPEC trimmed its 2024 and 2025 oil demand growth forecasts for the fifth time this year.
Now, the cartel expects the world’s oil demand growth at 1.61 million barrels per day from the previously 1.82 million barrels per day.
For 2025, OPEC says the world oil demand growth forecast is now at 1.45 million barrels per day, a 900,000 barrels per day cut from the previously expected 1.54 million barrels per day.
On the changes, OPEC says that the downgrade for this year owes to more bearish data received in the third quarter of 2024 while the projections for next year relate to the potential impact that will arise from US tariffs.
By Adedapo Adesanya
The duo of Afriland Properties Plc and Geo-Fluids Plc crashed the NASD Over-the-Counter (OTC) Securities Exchange by a marginal 0.06 per cent on Wednesday, December 11 due to profit-taking activities.
The OTC securities exchange experienced a downfall at midweek despite UBN Property Plc posting a price appreciation of 17 Kobo to close at N1.96 per share, in contrast to Tuesday’s closing price of N1.79.
Business Post reports that Afriland Properties Plc slid by N1.14 to finish at N15.80 per unit versus the preceding day’s N16.94 per unit, and Geo-Fluids Plc declined by 1 Kobo to trade at N3.92 per share compared with the N3.93 it ended a day earlier.
At the close of transactions, the market capitalisation of the bourse, which measures the total value of securities on the platform, shrank by N650 million to finish at N1.055 trillion compared with the previous day’s N1.056 trillion and the NASD Unlisted Security Index (NSI) went down by 1.86 points to wrap the session at 3,012.50 points compared with 3,014.36 points recorded in the previous session.
The alternative stock market was busy yesterday as the volume of securities traded by investors soared by 146.9 per cent to 5.9 million units from 2.4 million units, as the value of shares transacted by the market participants jumped by 360.9 per cent to N22.5 million from N4.9 million, and the number of deals increased by 50 per cent to 21 deals from 14 deals.
When the bourse closed for the day, Geo-Fluids Plc remained the most active stock by volume (year-to-date) with 1.7 billion units valued at N3.9 billion, followed by Okitipupa Plc with 752.2 million units worth N7.8 billion, and Afriland Properties Plc 297.5 million units sold for N5.3 million.
Also, Aradel Holdings Plc, which is now listed on the Nigerian Exchange (NGX) Limited after its exit from NASD, remained the most active stock by value (year-to-date) with 108.7 million units sold for N89.2 billion, trailed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.5 million units worth N5.3 billion.
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