Oklahoma oil, gas tax revenue hits record high in FY 2022

Revenue from Oklahoma’s oil and gas production taxes reached a record high in fiscal 2022, topping $1.5 billion, the state treasurer reported on Wednesday.

As prices for the commodities spiked, the taxes generated $1.53 billion, up nearly 103% in the fiscal year that ended June 30 compared to fiscal 2021. 

“Inflationary forces are a significant concern for consumers, but Oklahoma’s macro economy is benefitting from current energy prices and low unemployment,” Treasurer Randy McDaniel said in a statement.

 After dropping dramatically with the onset of the COVID-19 pandemic in 2020, energy producing states with severance taxes have seen revenue come roaring back amid high demand and as sanctions were piled on Russia for its invasion of Ukraine.

June collections of $171.2 million in Oklahoma also set a one-month record. They were based on April production when crude oil averaged $101.78 per barrel in Cushing and natural gas averaged $6.60 per million BTU at Henry Hub, according to the treasurer’s statement.

Oklahoma, a top-five producer of those energy commodities, is not alone in setting revenue records. 

In Texas, oil production tax revenue of $5.058 billion so far in fiscal 2022, which ends Aug. 31, is already 30% higher than the previous record of $3.89 billion set in fiscal 2019. The state’s natural gas production tax has generated $3.412 billion, blowing past the previous all-time high of $2.68 billion reached in fiscal 2008.  

Overall fiscal 2022 tax revenue in Oklahoma totaled $16.46 billion, marking a 15% increase over fiscal 2021. Gross individual and corporate income tax revenue was up 8.6% at $5.78 billion, while sales and use taxes generated nearly $6.6 billion, an increase of 13.3%. 

“Economic activity remains strong as reflected in sales and use tax receipts,” McDaniel said.