Oil Price  Rise  Bolsters  Nigeria’s Revenue By N5trn 

Nigeria’s fiscal outlook has received a significant boost following a sharp rise in global crude oil prices triggered by tensions linked to the United States–Iran conflict, with government earnings exceeding projections by over N5tn within two months.

The surge, driven largely by price increases rather than production growth, has pushed oil revenues far above the Federal Government’s 2026 budget benchmark, offering short-term financial relief while simultaneously intensifying economic pressure on citizens through rising fuel costs.

The crisis, which began on February 28 when oil traded below $70 per barrel, has since driven prices above $120 at peak levels. As of the latest data, Brent crude trades at about $110 per barrel, while Bonny Light, Nigeria’s flagship grade, has reached $134.

Nigeria’s 2026 budget was built on a daily production estimate of 1.8 million barrels, a benchmark price of $64.85 per barrel, and an exchange rate of N1,400 to the dollar. Based on these assumptions, expected daily revenue stood at approximately $116.73m, translating to about N163.42bn.

However, actual earnings in March and April significantly outperformed these projections. In March, oil production averaged 1.55 million barrels per day, while crude prices rose to $95.03 per barrel, with the exchange rate averaging N1,370.

This pushed daily revenue to about $147.30m, equivalent to N201.80bn, creating a daily surplus of N38.38bn and a total windfall of approximately N1.19tn for the month.

The gains became more pronounced in April, as both production and prices increased. Output rose to an estimated 1.7 million barrels per day, while prices surged to $127.05 per barrel, with the exchange rate at N1,365. Daily revenue climbed to about $216.0m, translating to N294.84bn, and generating a daily surplus of N131.42bn. Over 30 days, this resulted in an estimated N3.94tn windfall

Combined, the excess revenue from both months stands at about N5.13tn, underscoring the dominant role of global price movements in shaping Nigeria’s oil earnings.

Despite production levels falling short of budget targets, the price surge ensured that revenues remained well above expectations, highlighting the country’s continued dependence on external market forces.

Further analysis shows that without the increase in crude prices, revenue performance would have been significantly weaker. At the benchmark price of $64.85, March earnings would have dropped considerably despite similar production levels, with a similar trend observed in April.

While the revenue boost offers temporary fiscal relief, it has also translated into higher fuel costs domestically. The Nigerian National Petroleum Company Limited adjusted the official selling prices of its crude grades for May-loading cargoes, raising Bonny Light by $6.13 per barrel and Forcados by $7.01.

The impact was immediately felt in the downstream sector, as then Dangote Petroleum Refinery increased its gantry price to N1,275 per litre, prompting filling stations to raise pump prices to between N1,350 and N1,400, depending on location.