Nigeria may have forfeited an estimated ₦28.3 trillion in potential revenue due to low oil production and ongoing subsidy obligations, despite the recent surge in global crude prices triggered by the Iran conflict, according to Dele Oye, Chairman of the Alliance for Economic Research and Ethics.
Oye, who also served as the immediate past Chairman of the Organised Private Sector of Nigeria, said the country failed to convert high oil prices into fiscal gains. “When crude soared past $100 per barrel, other nations capitalized on the windfall. Nigeria, however, remained largely on the sidelines. On paper, we should have realized a ₦28.3 trillion boost, but production gaps and structural inefficiencies kept our pockets empty,” he explained.
He noted that Nigeria currently produces 1.46 million barrels per day, well below the 1.84 million bpd target, leaving a daily shortfall of 380,000 barrels. Much of the country’s crude is already committed to creditors and refineries, while the national subsidy regime further drains potential revenue. “Even during periods when prices were exceptionally high, much of the extra revenue remained a mirage,” Oye said.
Oye added that even a portion of the lost windfall could have been deployed to address critical sectors, including establishing a strategic petroleum reserve, subsidizing fertilizers ahead of the planting season, expanding compressed natural gas (CNG) usage, rehabilitating refineries, and providing targeted support to vulnerable households. “Without addressing production shortfalls, these opportunities remain largely theoretical,” he noted.
He urged the federal government to focus on long-term resilience rather than temporary fixes, recommending measures such as selling crude to local refineries in naira, digitizing fertilizer distribution, introducing flexible fuel taxes, scaling up CNG and LPG adoption, securing oil assets to close the production gap, and ring-fencing windfalls into the Sovereign Wealth Fund and Excess Crude Account. Oye warned against over-reliance on high oil prices, stating, “Oil booms are fleeting. The real test is whether Nigeria can build an economy resilient enough to thrive in both boom and bust cycles.”
