Ngozi-Okonjo-IwealaAbout 65 million barrels of crude oil worth N1.1 trillion was short in the first half of this year, using the 2013 budget estimate by government, Daily Trust can reveal.

The National Assembly passed a N4.987 trillion budget for 2013 last December, based on oil production of 2.562 million barrel per day but statistics from the National Bureau of Statistics (NBS) last Friday showed that the country’s oil production average in the last six months was at 2.2 million barrels daily. This culminates to a shortfall of about 360,000 barrels daily.

Giving the statistics of the economy for the last three months, the bureau said the average daily production of crude oil in the second quarter of 2013 was recorded at 2.11 million barrels per day, a decline from 2.29 million barrels per day recorded in the first quarter of the year.

According to the report, the loss is even worse when compared to 2.38 million barrels per day recorded in the second quarter of 2012.
When combined, the two production averages of first and second quarters stood at 2.2 mbpd.

The report signed by the Statistician General,  Dr. Yemi Kale, also revealed that supply disruptions as a result of pipeline vandalisations remained a challenge to the oil industry, adding that the sector benefited from the relative stability in international crude oil market price, as well as the naira exchange rate.

Minister of Finance and Coordinating Minister of the Economy, Dr. Ngozi Okonjo-Iweala, recently told the House of Representatives that government was seeking an amendment and not supplementary to the 2013 budget owing to the shortfall in revenue generation for the country.

The minister, at the meeting with the House Committee on Appropriation, said the nation was having a shortfall from oil revenue amounting to about 400, 000 barrels of crude oil per day worth about N160 million daily, in addition to a drop in customs duties.

She said: “What we are asking for very clearly is an amendment. We cannot ask for supplementary budget when we are having revenue shortfall; when we don’t even have the revenue base to spend more.”

According to her, there is a shortfall in oil revenue as a result of “quantity shock” and oil theft, as well as a drop in customs duties, adding that this is a challenge to the implementation of the budget.

Okonjo-Iweala explained that in spite of this challenge, the implementation of the budget was moving on smoothly, with N600 billion capital component released in the first and second quarters and a cash backing of N585 billion.

Also Minister of State for Finance, Alhaji Yerima Ngama, at various Federation Account Allocation Committee meetings lamented the high rate of vandalism that is increasingly reducing the revenue to the federation coffers.

He blamed the shortfall on the continued crude oil theft, leakages occasioned by breaks in pipelines at various terminals as well as HP compressor failure and repair works.


Information from Daily Trust was used in this report.