Nigeria posted an estimated revenue surplus of about N5.13 trillion within two months, driven by a sharp rally in global crude oil prices linked to escalating tensions between the United States and Iran, even as domestic fuel costs continued to rise.
The geopolitical crisis, which began on February 28 when oil traded below $70 per barrel, triggered a sustained price surge. At peak levels, crude climbed above $120 per barrel. As of the latest market data, Brent crude traded around $110 per barrel, while Nigeria’s Bonny Light grade hovered at approximately $134 per barrel.
The Federal Government’s 2026 budget is based on oil production of 1.8 million barrels per day, a benchmark price of $64.85 per barrel, and an exchange rate of N1,400 to the dollar. Under these assumptions, projected daily oil revenue stands at roughly $116.73 million, equivalent to about N163.42 billion.
However, actual earnings in March and April significantly exceeded these projections, largely due to elevated crude prices.
Data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) shows that March production averaged 1.55 million barrels per day, below the budget target. Despite this, the average crude price rose to $95.03 per barrel, with an exchange rate of N1,370 to the dollar. This resulted in daily revenue of about $147.3 million, translating to approximately N201.8 billion.
The figure represents a daily surplus of N38.38 billion above the budget benchmark. Over 31 days, this amounted to an estimated N1.19 trillion in additional revenue.
In April, both production and prices strengthened further. Output was estimated at 1.7 million barrels per day, while the average price climbed to $127.05 per barrel. With the exchange rate at N1,365, daily revenue rose to approximately $216 million, or N294.84 billion.
This indicates a daily surplus of N131.42 billion compared to the budget estimate. Over the 30 days, the excess revenue reached about N3.94 trillion.
Combined, the two months delivered a total windfall of N5.13 trillion, with price movements accounting for the bulk of the increase rather than production growth.
An analysis of the figures shows that even with lower-than-target output in March, stronger oil prices more than compensated for the shortfall. While production improved in April, the magnitude of the revenue increase remained largely tied to the spike in global crude prices.
Without the price rally, earnings would have been considerably lower. At the budget benchmark price, March revenue would have averaged about N137.71 billion per day, while April would have generated approximately N150.5 billion daily, highlighting the extent to which external market conditions influenced earnings.
The surge in oil receipts offers short-term fiscal relief but also underscores Nigeria’s continued exposure to global price volatility, as revenue performance remains closely linked to external market dynamics.
Meanwhile, rising crude prices have translated into higher domestic fuel costs. The Nigerian National Petroleum Company Limited (NNPCL) adjusted official selling prices for its crude grades for May-loading cargoes, increasing Bonny Light and Forcados benchmarks.
Refined product prices responded quickly. Gantry prices at the Dangote Petroleum Refinery rose to about N1,275 per litre, while retail pump prices climbed to between N1,350 and N1,400 in several locations.
Industry stakeholders have raised concerns over the impact on consumers. The Petroleum Products Retail Outlet Owners Association of Nigeria noted that sustained increases in crude prices could push petrol prices beyond N1,500 per litre if tensions persist.
Energy economists describe the situation as a mixed outcome for the economy. While government revenues improve, higher fuel costs are driving transportation expenses and inflation, placing additional pressure on households.
Calls have emerged for targeted interventions, including cash transfers, to cushion vulnerable populations. However, experts point to data limitations as a key obstacle to implementing such measures effectively.
At the same time, local refiners have renewed calls for a review of crude pricing for domestic supply. Industry operators argue that reliance on international benchmarks inflates input costs and undermines local refining capacity. Proposals include adopting a pricing framework that reflects domestic market conditions.
Analysts also suggest that the government could explore fixed-price crude supply arrangements for local refineries, tied to commitments on stabilising refined product prices.
Overall, the revenue boost highlights both the immediate fiscal gains from rising oil prices and the structural risks associated with dependence on volatile global markets.