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Q3 2025: Nigeria Oil Revenue Target, Spending Short by 62%, 41.57% Respectively
Nigeria’s oil revenue performance deteriorated sharply in the third quarter of 2025 and missed budget expectations by a wide margin of 62 percent.
This reinforced concerns over the country’s fragile fiscal position, even as modest gains were recorded in actual receipts.
In the same vein, Nigeria’s total government expenditure fell significantly below projections in the third quarter of 2025, coming in at N8.03 trillion, 41.57 percent short of the prorated quarterly budget estimate of N13.75 trillion.
Fresh data from the Budget Office of the Federation showed that gross oil revenue for the quarter stood at N4.87 trillion, far below the prorated quarterly projection of N12.76 trillion. This represents a shortfall of N7.88 trillion, or 61.8%, underscoring the scale of the gap between projections and reality.
The development comes at a time when the federal government is contending with mounting debt service obligations, persistent fiscal deficits, and an urgent need to strengthen revenue mobilisation, particularly from non-oil sources through ongoing tax reforms and improved collection systems.
Under the 2025 fiscal framework, the government projected gross federally collectible revenue of N78.08 trillion, with oil expected to account for N51.05 trillion, representing 65.38% of total revenue.
On a prorated basis, quarterly revenue was estimated at about N19.52 trillion, highlighting the extent to which oil underperformance is weighing on overall fiscal outcomes.
Despite the sharp shortfall, oil revenue showed slight improvement compared to previous periods. The N4.87 trillion recorded in Q3 was higher than the N4.77 trillion posted in Q2 2025 and N4.62 trillion in the corresponding period of 2024.
According to the Budget Office, this translates to a 2.1% quarter-on-quarter increase and a 5.41% year-on-year growth, an indication of marginal recovery in oil receipts, albeit from a weak base and still far below expectations.
A detailed breakdown of oil revenue components revealed that most major streams fell significantly short of their targets.
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Crude oil and gas sales generated N622.99 billion during the quarter, compared to a projected N1.18 trillion, leaving a deficit of N555.2 billion or 47.12%. Petroleum Profit Tax and gas taxes performed even worse, yielding N1.97 trillion against a target of N7.85 trillion, a massive shortfall of N5.87 trillion, or 74.82%.
Similarly, oil and gas royalties came in at N2.01 trillion, missing the quarterly estimate of N3.43 trillion by N1.42 trillion. Incidental oil revenue, which includes royalty recoveries and marginal field licence earnings, also underperformed sharply, generating just N37 billion compared to a projected N295.88 billion.
In contrast, a handful of revenue lines outperformed expectations, offering limited relief. Concessional rentals rose significantly above projections, generating N7.89 billion against a budgeted N1.03 billion, an overperformance of 667.5%. Miscellaneous oil revenues, including pipeline fees, also exceeded estimates at N9.65 billion versus the projected N5.86 billion.
Additionally, gas flared penalties and exchange gains contributed N181.61 billion and N28.65 billion respectively, despite not being captured in the original budget projections.
The persistent underperformance highlights the structural vulnerabilities in Nigeria’s fiscal framework, which remains heavily dependent on oil revenues despite sustained policy efforts to diversify income sources. While the government has intensified non-oil revenue mobilisation through tax reforms, digitised collection platforms and broader fiscal restructuring, oil receipts continue to play a central role in financing public expenditure, servicing debt and sustaining budget implementation.
Production shortfalls have further compounded the problem. The 2025 budget was anchored on a crude oil production benchmark of 2.1 million barrels per day (mbpd), but actual output has consistently trailed this assumption.
Figures from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), indicate that total crude oil and condensate production between January and September 2025 stood at 454.28 million barrels. This translates to an average daily production of 1.66 mbpd, well below the budget benchmark.
Nigeria has also struggled to meet its production quotas under the Organisation of the Petroleum Exporting Countries (OPEC) for several months, reflecting ongoing challenges such as oil theft, pipeline vandalism, underinvestment and operational inefficiencies in the upstream sector.
The widening gap between projected and actual oil revenue underscores the risks of continued reliance on hydrocarbons in an increasingly volatile global energy market. It also raises fresh concerns about the sustainability of Nigeria’s fiscal assumptions, especially as borrowing continues to rise to plug revenue shortfalls.
With oil still accounting for the bulk of government earnings, analysts warn that without significant improvements in production levels and a more aggressive push toward revenue diversification, Nigeria’s fiscal stability will remain exposed to recurring shocks.
Despite the shortfall against the expenditure target, spending in the period was N0.39 trillion, or 4.86 per cent, higher than the N7.64 trillion recorded in the corresponding quarter of 2024.
The report also showed that the Federal Government posted a fiscal deficit of N0.33 trillion during the quarter under review. It noted that non-debt recurrent expenditure stood at N2.66 trillion, reflecting a decline of N739.01 billion, or 21.75 percent, below the quarterly estimate of N3.40 trillion. However, this figure was still 31.20 percent higher than the N1.83 trillion recorded in Q3 2024.
In addition, statutory transfers amounted to N360.32 billion within the period. Overall, the fiscal deficit translated to a deficit-to-GDP ratio of 2.29 percent, which remains within the statutory 3 percent threshold as well as the ECOWAS convergence benchmark, indicating compliance despite elevated spending pressures and persistent implementation gaps across key budget components.
President and Chief Executive of Dangote Industries Limited, Aliko Dangote, has assured investors that the Initial Public Offering (IPO) of Dangote Petroleum Refinery & Petrochemicals FZE presents a compelling opportunity for strong returns and sustainable wealth creation, positioning the offer as a chance for Nigerians and Africans to participate in one of the continent’s most significant industrial achievements.
Speaking during the “Facts Behind the Offer” presentation at the Nigerian Exchange (NGX) in Lagos, Dangote described the $1.6 billion offer as the largest IPO ever undertaken in Africa, underscoring the company’s commitment to broadening ownership and enabling millions of individuals to benefit from the value generated by a world-class industrial enterprise.
According to him, the refinery IPO is more than a capital raising exercise; it is an opportunity for investors to become part owners of a strategic asset that is already delivering strong operational and financial results.
“The Dangote Refinery IPO is more than an investment opportunity; it is an opportunity for millions of Nigerians and Africans to build lasting wealth through ownership of a world-class industrial asset. We have built a refinery that is already delivering strong revenues, solid profitability and significant value to the economy. By investing today, shareholders are not only positioning themselves to enjoy attractive returns and dividend prospects, but they are also laying the foundation for generational wealth that can benefit their children and grandchildren. This offer is designed to allow ordinary people to participate in an extraordinary success story and share in the long-term value that Dangote Refinery will continue to create for decades to come.”
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He emphasised that the offer reflects the Group’s long-standing philosophy of creating prosperity through broad ownership, enabling ordinary citizens to share in the success of transformational businesses
Dangote noted that the refinery has already fulfilled its core vision of transforming Nigeria from a major importer of refined petroleum products into a significant refining and export hub, supplying domestic demand while serving markets across Africa and beyond.
“We are not merely offering shares; we are offering Nigerians an opportunity to participate in a transformational chapter of our economic history. This is a strategic investment in an asset that is creating jobs, conserving foreign exchange, enhancing energy security and strengthening Africa’s industrial capacity,” he stated
The IPO has been structured to encourage broad participation, with 4.1 billion ordinary shares offered at N525 per share and a minimum subscription of just 10 shares valued at N5,250. The offer is expected to attract a diverse range of investors, including civil servants, teachers, artisans, students, institutional investors, pension funds and members of the Nigerian diaspora.
Highlighting the refinery’s financial strength, Dangote disclosed that the company generated approximately N19.47 trillion in revenue during the first half of 2026, while profit after tax reached N2.55 trillion, demonstrating its capacity to create sustainable value for shareholders.
At the offer price, Dangote Petroleum Refinery is expected to achieve an implied market capitalisation of approximately N65.22 trillion. Together with the market capitalisations of Dangote Cement Plc and Dangote Sugar Refinery Plc, the listing is projected to create an equity cluster valued at about N83.5 trillion, making the Dangote Group the largest equity cluster on the Nigerian Exchange.
Commenting on the significance of the transaction, NGX Group Chairman, Umaru Kwairanga, described the offer as a defining milestone for Africa’s capital markets and a demonstration of the capacity of African capital to finance large-scale projects capable of accelerating economic growth and development across the continent.
Similarly, Lagos State Governor, Babajide Sanwo-Olu, hailed the IPO as a watershed moment for Africa’s financial markets, noting that it reinforces confidence in the continent’s ability to mobilize capital and invest in its own future.
“This transaction is changing perceptions about what is possible in Africa. It is creating opportunities for a broad spectrum of investors, from small business owners and market traders to institutional investors and technology entrepreneurs,” he said.
Also speaking, Chief Executive Officer of the Botswana Stock Exchange, Kesegofetse Molatlhegi, commended Dangote for demonstrating that African ambition can deliver globally significant industrial projects, while encouraging greater continental participation in the refinery’s growth story.
For his part, Chief Executive Officer of Dangote Petroleum Refinery, Davide Bird, highlighted the refinery’s operational achievements, noting that it has become the largest single supplier of refined petroleum products into Europe and continues to maintain safe, reliable and efficient operations. He added that the company remains focused on delivering its Vision 2030 objective of becoming the world’s largest integrated refinery and petrochemical complex.
Reaffirming the significance of the offer, Dangote said the IPO represents an opportunity for investors to move from consumers to owners and participate in the long-term growth of one of Africa’s most strategic industrial enterprises.
“This is a defining investment opportunity. We want millions of Nigerians and Africans to become owners of a business that has been built to create value for generations. Those who invest today are positioning themselves to benefit from the growth, resilience and enduring legacy of a truly transformational enterprise,” he said.
Photo Caption: L-R: Ooni of Ife, Adeyeye Enitan Ogunwusi; Managing Director, Coronation Asset Management Limited, Aigbovbioise Aig-Imoukhuede; Group Chairman, NGX Group, Dr Umaru Kwairanga; President/CE, Dangote Industries Limited, Aliko Dangote; Group Managing Director/Chief Executive Officer, NGX Group, Temi Popoola; Lagos Governor, Babajide Sawo-Olu; Group Executive Director, Commercial Operations, Oil & Gas, Fertiliser and WAEP, Fatima Aliko-Dangote, at the Dangote Petroleum Refinery & Petrochemicals Initial Public Offering (IPO) Facts Behind the Figure presentation at the Nigerian Exchange (NGX), Lagos on Monday, September 14, 2026.
The President of Dangote Industries Limited (DIL), Aliko Dangote, has expressed support for the economic reforms of the President Bola Ahmed Tinubu administration, particularly the removal of the fuel subsidy and the liberalisation of the foreign exchange market.
The industrialist gave the commendation in Lagos on Monday at the Nigerian Exchange Group (NGX) during the formal launch of the Initial Public Offering (IPO) of Dangote Petroleum Refinery and Petrochemicals (DPRP).
He also commended Tinubu’s leadership and said the Dangote Refinery was supporting the administration’s efforts.
“I want to thank him for taking a lot of bold steps by removing the subsidy and democratising the exchange rate…” Dangote said.
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He assured that the Dangote Group would continue working with the government to contribute to Nigeria’s development.
“So, we thank you very much for your leadership and we will continue to partner with the government to ensure that we make this country great and we make Africa great,” he said.
Dangote, a former president of the Nigerian Exchange, also expressed surprise at the transformation of the bourse, saying he had not expected it to reach its current level.
“I was the president of this exchange. Even when I was inviting people to come and help me turn the exchange around to make it a world-class exchange, I never thought this exchange would be at this level in 2026,” he said.
He revealed that a more grand ceremony would be held with Tinubu in attendance.
The refinery’s IPO, which opened on Monday, offers 4.1 billion new ordinary shares at N525 per share, with a minimum subscription of 10 shares valued at N5,250.
The offer is scheduled to close on 13 October 2026, subject to the terms of the prospectus.
President of Dangote Industries Limited, Aliko Dangote, has described the Initial Public Offering of Dangote Petroleum Refinery and Petrochemicals as a “People’s IPO” as the N2.15tn offer officially opened on the Nigerian Exchange on Monday.
Dangote sounded the gong at the NGX trading floor in Lagos to formally open the offer, marking a major milestone for Nigeria’s capital market.
The IPO comprises 4.1 billion new ordinary shares priced at N525 per share, with a minimum subscription of 10 shares valued at N5,250.
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The offer, which opened on September 14, 2026, is scheduled to close on October 13, 2026, subject to the terms contained in the prospectus.
Speaking after sounding the gong, Dangote said the offering was aimed at widening public participation in the ownership of the refinery.
“We fully share all our prosperity with the people. That’s why we call this ‘People’s IPO’. We know the journey has actually just started.
“It’s not only about the refinery.”
The Dangote Refinery IPO is the first refinery offering to investors on the Nigerian stock market in the 66-year history of the Nigerian Exchange.
The offer is open to retail, institutional and eligible African investors, providing members of the public with an opportunity to acquire an interest in one of Africa’s largest industrial projects.
Dangote also disclosed that the IPO was part of a broader plan by the Dangote Group to list more of its companies on the capital market.
He said the group intended to list every company that would operate under its umbrella in the future.
“We, as a group, will list every single company that will operate. I don’t know about the others, but I know our own market cap, even at a 10 times P/E ratio by 2030, should not be less than $350 billion,” he said.
The businessman added that the Nigerian Exchange would provide a platform for the group to pursue listings on other international exchanges.
“From this exchange, then we can go to any other place.
“So, Nigeria and Africa is our base. We want to make sure that we join our continent.”
The Dangote Refinery, located in the Lekki Free Zone, Lagos, has been positioned as a major investment in Nigeria’s domestic refining capacity and efforts to reduce dependence on imported petroleum products.
The opening ceremony was attended by Lagos State Governor Babajide Sanwo-Olu, NGX Group Chairman Umaru Kwairanga, the Ooni of Ife, Oba Adeyeye Enitan Ogunwusi Ojaja II, Zenith Bank founder Jim Ovia and other dignitaries.
The N2.15tn IPO will remain open until October 13, 2026, subject to the terms contained in the prospectus.
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