Refineries lost N377bn in three years

Nigerian National Petroleum Corporation data has  shown that the  country’s ailing refineries lost a total of N376.56bn in the last three years.

The trading deficit (loss) recorded by the refineries rose by 12.43 per cent to N148.97bn in 2019, compared to 2018.

The refineries posted a loss of N132.50bn in 2018, up from N95.09bn in 2017, according to the NNPC data.

Nigeria, Africa’s top oil producer, relies largely on importation for refined petroleum products as its refineries have remained in a state of disrepair for many years despite several reported repairs.

The refineries, which are located in Port Harcourt, Kaduna and Warri, have a combined installed capacity of 445,000 barrels per day but have continued to operate far below the installed capacity.

The NNPC, in its latest Monthly Financial and Operations Report released on Sunday, said the refineries lost N13.56bn in December.

They lost N8.36bn in January; N10.26bn in February; N16.04bn in March; N11.44bn in April; N13.63bn in May, and N17.42bn in June.

The plants recorded a loss of N13.84bn in July; N13.21bn in August; N7.07bn in September; N11.72bn in October; and N12.52bn in November.

Kaduna refinery lost N58.97bn; Warri refinery, N45.18bn; and Kaduna refinery, N44.75bn.

In the first term of the President, Major General Muhammadu Buhari (retd), the NNPC had planned to rehabilitate the refineries to attain a minimum of 90 per cent capacity utilisation.

The plan was to use third-party financiers and the original refinery builders to provide the requisite funding and technical support.

However, after over one and a half years, negotiations with financiers stalled in December 2018 due to varying positions on key commercial terms.

The Group Managing Director, NNPC, Mr Mele Kyari, who took over leadership in July 2019, had reiterated his plan to revamp the refineries and end fuel importation by 2023.

He had said, “We will deliver on the rehabilitation of the four refineries within the life of this administration and support the private sector to build refineries.

“We will support the Dangote refinery to come on stream on schedule. We will transform Nigeria into a net exporter of petroleum products by 2023.”

In March 2019, the NNPC announced the formal commencement of the first phase of the rehabilitation of Port Harcourt refinery complex, which it said would last for six months.

The Minister of State for Petroleum Resources, Chief Timipre Sylva, who confirmed in October 2019 that the rehabilitation of Port Harcourt refinery was ongoing, said Warri and Kaduna refineries would be revamped in the first half of this year.

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