This study examines oil revenue volatility and Nigeria’s fiscal stability: evidence from budget performance, with particular emphasis on oil rents as a percentage of GDP, oil price volatility, fuel pump price volatility, and oil exports. Using annual time-series data covering the period 1985 to 2024, the study employs the Augmented Dickey-Fuller (ADF) unit root test to examine the stationarity properties of the variables, the Johansen cointegration test to determine the existence of long-run relationships, and the Vector Error Correction Model (VECM) to analyze both short-run dynamics and long-run adjustments. The VECM results show that oil price volatility has the strongest positive and statistically significant effect on government debt to GDP, indicating that fluctuations in global oil prices significantly increase fiscal instability in the short run. Oil rents also exhibit a positive and significant effect, implying that higher dependence on oil revenue increases vulnerability to fiscal shocks. Fuel pump price volatility shows a positive but weakly significant effect, while oil exports have a negative relationship with government debt to GDP, suggesting a mild stabilizing effect on fiscal performance. The error correction term is negative and highly significant (-0.703), indicating that approximately 70% of short-run deviations from long-run equilibrium are corrected within one year, reflecting a relatively fast adjustment process. The study concludes that oil revenue volatility is a major determinant of fiscal instability and weak budget performance in Nigeria. Policy recommendations emphasize the need for revenue diversification, stronger fiscal stabilization mechanisms, improved oil export efficiency, and disciplined medium-term fiscal planning to reduce vulnerability to oil market shocks.