Despite Output Rise, Nigeria Underproduces Crude Oil by 35.3m Barrels in 5 Months
Emmanuel Addeh in Abuja
Nigeria produced about 35.3 million barrels less crude oil and condensate than projected in its 2026 budget between January and May, highlighting the gap between the government’s fiscal assumptions and actual oil sector performance despite a steady recovery in output in recent months.
A THISDAY analysis of monthly data released by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) showed that combined crude oil and condensate production averaged 1.61 million Barrels Per Day (BPD) in the first five months of the year, falling short of the federal government’s budget benchmark of 1.84 million bpd.
According to the upstream regulator’s figures, the country’s production performance improved progressively after dropping to a low of 1.48 million bpd in February. Besides, combined output stood at 1.63 million bpd in January and declined to 1.48 million bpd in February.
However, it recovered to 1.55 million bpd in March, rose further to 1.66 million bpd in April and reached 1.70 million bpd in May, the highest level recorded since July last year.
But a review by THISDAY indicated that the upward trend was insufficient to bridge the gap between projected and actual output target underpinning the N68.32 trillion 2026 federal budget by the Bola Tinubu administration.
An analysis of the NUPRC data showed that Nigeria produced a total of approximately 242.6 million barrels of crude oil and condensate between January and May. By contrast, the budget benchmark implied expected production of about 277.8 million barrels over the same 151-day period.
The difference translated into a production shortfall of about 35.3 million barrels, representing an underperformance of approximately 12.7 per cent relative to the government’s budget benchmark output.
The figures underscore the continuing challenge facing Africa’s largest oil producer as it seeks to increase output sufficiently to support government revenues, improve foreign exchange earnings and reduce pressure on public finances.
The 2026 budget was anchored on a benchmark oil price of $64.85 per barrel, and an exchange rate of N1,400 to the United States dollar. The budget also allocates N4.799 trillion for statutory transfers and N15.8 trillion for debt service. It sets aside N15.4 trillion for recurrent expenditure and N32.2 trillion for capital expenditure.
At the budget oil price, the 35.3 million barrels not produced during the first five months of the year carry a gross value of approximately $2.29 billion. Converted at the budget exchange rate, the amount is equivalent to about N3.2 trillion, the review indicated.
Although actual fiscal losses cannot be directly inferred from the production gap because government revenue depends on factors such as production-sharing contracts, joint venture arrangements, royalties, taxes and operational costs, the figures nevertheless illustrated the magnitude of the volume deficit relative to the 2026 budget assumptions.
The underproduction comes even as Nigeria has made notable progress in reversing years of declining output caused by crude theft, pipeline vandalism, operational disruptions and underinvestment in upstream infrastructure.
Recent efforts by the federal government and industry stakeholders to improve pipeline security and restore shut-in production have contributed to the gradual increase in output witnessed this year.
Data from the upstream regulator showed that the May figures were particularly significant because they showed that average crude oil production alone reached 1.53 million bpd, representing 102 per cent of Nigeria’s OPEC quota of 1.50 million bpd. The achievement marked one of the few occasions in recent years that the country has met and slightly exceeded its assigned production ceiling under the oil producers’ group.
But the fiscal benchmark of 1.84 million bpd remains substantially higher than current production levels, requiring further growth in output during the remainder of the year.
To meet the budget target on an annual basis, Nigeria would need to sustain significantly higher production levels over the coming months, especially given the shortfall already accumulated during the first five months.
Overall, the country’s average output of 1.61 million bpd from January to May was about 234,000 barrels per day below the budget benchmark, reflecting the scale of the production challenge.
Nevertheless, the production trajectory suggested that the gap may narrow if current gains are sustained. Output increased by nearly 15 per cent between February and May, rising from 1.48 million bpd to 1.70 million bpd, indicating that measures aimed at boosting production are beginning to yield results.