Nigeria’s gross profit from crude oil and gas sales fell sharply by N824.66 billion in 2024, even as total oil revenue and production increased, according to the Budget Implementation Report for Q4 2024 released by the Budget Office of the Federation.
Gross profit dropped to N1.08 trillion in 2024 from N1.90 trillion in 2023, a 43.3% decline year-on-year, and fell short of the government’s target of N1.46 trillion by N385.39 billion.
While total oil and gas revenue rose to N15.07 trillion, gross profit accounted for only 7.2% of total revenue, down from 22.8% in 2023.
Quarterly figures showed the largest decline in Q2 2024 (N161.49 billion) with modest recoveries in Q3 and Q4, leaving the full-year profit below expectations.
The report highlighted that Petroleum Profit Tax, royalties, and exchange rate gains drove revenue growth.
PPT and gas income more than doubled to N6 trillion, oil royalties surged 179.7% to N6.99 trillion, and exchange gains jumped 435.9% to N4.24 trillion.
Other streams, including gas flaring penalties and incidental oil revenue, also rose sharply.
Despite higher revenues, shrinking gross profit reflects rising operating costs, legacy obligations, and production-sharing arrangements, limiting the government’s underlying earnings.
Meanwhile, total deductions fell dramatically from N2.45 trillion in 2023 to N156.7 billion in 2024, lifting net oil revenue to the federation to N12.95 trillion, up 168.8% year-on-year.
Total revenue after the 13% derivation to oil-producing states reached N13.11 trillion, helping boost FAAC allocations.
The data suggest that while Nigeria is generating more naira from oil, profit margins are under pressure, underscoring the need for improved cost management in the upstream sector.
