Nigeria has recorded a significant jump in oil tax revenue, hitting ₦3.69 trillion in the first half of 2025, representing a 41.7% year-on-year increase from ₦2.604 trillion in the same period of 2024.
This surge was largely attributed to improved crude oil production, enhanced compliance by oil companies, and stronger revenue monitoring by government agencies. Data gathered from the Federation Account Allocation Committee (FAAC) and monthly performance reports from the Federal Inland Revenue Service (FIRS) confirmed the boost.
The FIRS breakdown of oil-related tax inflows between January and June 2025 showed significant gains in collections from Petroleum Profits Tax (PPT), Hydrocarbon Tax, and Company Income Tax (CIT) paid by oil and gas operators.
“The oil tax collections for June 2025 alone stood at ₦411.95 billion, representing a 13.5% increase over the ₦362.96 billion recorded in May,” one of the FAAC reports revealed.
Despite the positive trajectory, June’s collection still fell short of the monthly target of ₦600.17 billion, reflecting a shortfall of ₦188.22 billion (or 31.36%).
Crude oil production peaked at 1.8 million barrels per day, the highest level in over four years, contributing directly to the revenue boost. Improved remittances from NNPC Exploration & Production Ltd, the upstream subsidiary of the state-owned oil giant, were also instrumental.
“The reason for the increase in PPT collections when compared with the previous month is due to an increase in receipts from NNPC E&P,” FIRS noted.
In April 2025, oil tax remittance hit an all-time monthly high of ₦1.26 trillion, more than double the figures from March and May. Other monthly figures for H1 2025 included:
January: ₦864.97 billion
February: ₦377.19 billion
March: ₦407.5 billion
May: ₦362.96 billion
June: ₦411.95 billion
This compares favorably with the first half of 2024, where total collections stood at ₦2.604 trillion, with widely fluctuating monthly returns.
Economic analysts have credited the boost in revenue to the government’s renewed focus on oil sector reforms, improved security in oil-producing regions, and the impact of the Petroleum Industry Act (PIA).
Speaking to our correspondent, Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise (CPPE), emphasized that recent changes in sector governance and better monitoring are paying off.
“The increase in tax remittance is due to improved crude oil production and better organisation under NNPC’s restructured leadership. Security improvements and operational transparency are enhancing sector performance,” he said.
Yusuf, however, warned that gaps still exist in monitoring crude exports. He urged stronger oversight mechanisms to ensure all exports are accurately tracked and accounted for in tax collections.
“There are still concerns about malpractices in crude volume reporting and export transactions. Enhancing transparency at every stage of the value chain is vital to sustaining this revenue momentum,” he added.
Oil taxes remain one of Nigeria’s most crucial revenue sources, supporting allocations to federal, state, and local governments. The rise in collections offers fiscal breathing room for the government, especially as it seeks to reduce borrowing and expand public infrastructure.
President Bola Ahmed Tinubu has reiterated his commitment to increasing non-debt revenue and ensuring equitable distribution of the oil wealth. According to Yusuf, Tinubu recently urged state governors to ensure grassroots citizens feel the impact of increased revenue flows.
“President Tinubu reminded the governors that there were complaints from citizens that revenue growth was not trickling down. He tasked them to do more to bridge the gap,” Yusuf noted.
With oil production on the rise and more reforms underway, experts believe Nigeria is positioned to potentially exceed its H2 2025 targets — provided global oil prices remain stable and sabotage of infrastructure is curtailed.
FIRS and FAAC officials are optimistic that ongoing improvements in tax compliance and production reporting will continue to reflect in subsequent FAAC disbursements.
The Federal Government is also considering leveraging public-private partnerships (PPPs) and technology in tax administration to plug leakages and boost efficiency in collections.