Oil Industry Generates N23.8bn VAT In 3 Months

The oil and gas sector which comprises the upstream, midstream and downstream sub-sectors has generated N23.84bn in Value-Added-Tax for the Federal Government in the first quarter of 2021.

The National Bureau of Statistics disclosed this in its latest report on Statistics’ Sectoral Distribution of VAT report for Q1 2021 saying the oil producing sector recorded the highest remittances of VAT at N15.80bn while the gas sector recorded the lowest remittances totalling N1.27bn.

The increase could be attributed to the ease of economic activities during the COVID-19 pandemic.

Offshore operations representing the exploration of oil recorded N1.59bn in Q1, a quarter-on-quarter increase of 11.40 per cent from Q4 2020, during which N1.42bn was recorded.

It also recorded a year-on-year increase of 167.91 per cent from Q1 2020’s N592.1m value.

Breakdown Analysis

Oil production generated N15.80bn, representing a QoQ increase of 14.23 per cent from N13.83bn and  a YoY increase of 68.87 per cent from Q1 2020’s N9.35bn.

Petrochemical and petroleum refining brought in N2.17bn, representing an 11.73 per cent QoQ increase from Q4 2020’s N1.94bn, and a 65.47 per cent YoY increase from N1.32bn in Q1 2020.

Oil marketing which refers to the sale and distribution of petroleum products such as Premium Motor Spirit, Automotive Gas Oil and Dual Purpose Kerosene generated N3.02bn in VAT for Q1 2021.

This represented a QoQ increase of 38.30 per cent from Q4 2020’s N2.18bn and a YoY increase of 26.53 per cent from Q1 2020.

The gas downstream sector saw a 1.7 percent decrease in its YoY growth rate as it reduced from N1.29bn in Q1 2020 to N1.27bn in Q1 2021.

It however saw a 21.70 per cent QoQ increase in value from N1.04bn in Q4 2020.

The government recorded a total of N496.39bn in VAT for Q1 2021, representing a 9.17 per cent increase QoQ and a 52.93 per cent increase YoY.