Nigeria’s low crude oil production is barely able to cover the cost of imported petrol from its oil and gas revenue, Finance Minister Zainab Ahmed has said.

She told Reuters at the World Economic Forum in Davos that she hoped Nigerian oil production would average 1.6 million barrels per day (bpd) this year, up from around 1.5 million bpd in the first quarter.

The government had budgeted 1.8 million bpd of production, Ahmed said, blaming crude theft and attacks on oil infrastructure for the shortfall.

She said:“We are not seeing the revenues that we had planned for,” Ahmed said. “When the production is low it means we’re … barely able to cover the volumes that are required for the (petrol) that we need to import.”

Nigeria exports crude oil and imports refined petrol, suffering intermittent fuel shortages. It faces double-digit inflation and low growth, amid a shrinking labour market and mounting insecurity.

A plan to abolish its petrol subsidy was scrapped ahead of national elections in February 2023 and $9.6 billion was added to planned spending to cover it, putting pressure on the budget.

Nigeria raised $1.25 billion via a Eurobond sale in March at a premium rate and had planned to issue another bond. But Ahmed said the government had “not seen a good opportunity to go in.”

Its deficit is set to rise to 4.5 per cent of GDP this year due to the fuel subsidy, up from an original estimate of 3.42 per cent in the budget.

Nigeria’s central bank surprised markets this week by raising its main lending rate by 150 basis points to 13 per cent, after inflation rose to 16.82 per cent in April, the highest in eight months.

Ahmed said the central bank move was necessary.