15 November 2018, Sweetcrude, Lagos — Statistics obtained from the Department of Petroleum Resources, DPR’s NOGIAR report for 2017 showed that Nigeria’s four refineries worked at a combined 8.67 percent capacity in 2017.
While crude oil production peaked at 2.07 million barrels per day in 2017, the total installed capacity of the refineries remained at 446, 000bpd, of which the refineries could refine just 8.67 percent out of the production.
“The data tends to give credence to the traditional views on the Nigerian downstream sector and especially its weak link to the domestic upstream sector. This points to the need for growth in the refinery sector. The need for growth is urgent considering utilization capacity”, DPR’s Mordecai Ladan said in a note to SweetcrudeReports.
The inability of Nigeria’s refineries to work optimally had resulted in the availability of petroleum products in the country to depend primarily on importation.
The importation of Premium Motor Spirit, PMS popularly known as petrol stood at an average of 45, 780, 801.90 litres/day, posting a decrease of 7.8 percent from 2016. For Automotive Gas Oil, AGO mainly used as fuel for private power generation, the average volume imported for 2017 was 11, 641, 949.40 litres/day, a decrease of 4.5 when compared with the importation volume for 2016. Average for Aviation Turbine Kerosene, ATK was 1, 743, 606.53 litres/day in 2017 which is equal to a marginal decrease of 3.86 percent when compared to 2016 volumes.
“The decrease in the importation volumes which may be attributed to an increase in landing cost among other reasons may have been responsible for the fuel scarcity experienced towards the end of 2017,” he explained when asked the reason for the decrease in importation in 2017.
The dwindling local refinery production amid the rising demand of Nigeria’s high population demands in 2017, meant that most of the market needs for that year were met by products importation from foreign refineries.
The refining gap further meant that the local economy lad limited access to heavy-end refinery products such as Coke, Asphalt, and High Pour Fuel Oil, HPFO, that otherwise could have been locally produced for the value creation in the manufacturing sector had the refineries been running optimally.
Data showed that all through 2017, Kaduna Refining & Petrochemical Company refined just 110, 000 crude distillates, Port Harcourt Refining Company (New) refined 150, 000 while the old Port Harcourt refinery did 60, 000, Warri Refining & Petrochemical Company refined 125, 000 and the Niger Delta Petroleum Resources did just 1, 000, making a total of 446, 000 barrels.
As for crude oil refining, 16, 597.23bpd (15.09% utilisation rate), 6, 998.94bpd (4.6% utilisation rate), 14, 775.66bpd (11.82% utilisation rate), 696.90bpd (6.9% utilisation rate), making a total of 39, 068.73bpd refined by all four refineries, DPR’s data showed.
The Kaduna refinery has 110, 000bpd refining capacity, New Port Harcourt refinery has 150, 000bpd capacity, Old Port Harcourt refinery 60, 000bpd, Warri refinery 125, 000bpd while NDPR has 1, 000bpd, totaling 446, 000bpd.
The trend of downward spiraling performances by the refineries seemed not to have started last year. In 2016, the Kaduna refinery refined 10, 310. 69tbd, New Port Harcourt refinery did 32, 669.98tbd, Old PH refinery did not refine crude all through the year, Warri Refinery’s was pegged at 14, 746.13tbd, while NDPR did 605. 43tbd- total of 39, 068.73tbpd and 8.67 percent capacity utilisation.
As it stands, the refining capacity of the refineries cannot in any way stand the growing consumption needs of Nigeria on a daily basis.
Nigeria’s consumption of petrol declined by 2.3% in 2017, according to the National Bureau of Statistics, NBS. Total consumption of premium motor spirit (petrol) fell to 18.36 billion litres in 2017 from 18.8 billion litres in 2016, a decline of 0.44 billion litres.
However, despite frantic efforts by SweetcrudeReports to obtain Nigeria’s data on daily petrol consumption, it was discovered that all government agencies had varying statistics- not DPR, even the NNPC relies on data from Petroleum Products Pricing Regulatory Agency, PPPRA.
Yet, the PPPRA does not have current data of daily consumption of petroleum products across the country.
In 2012, when fuel subsidy was still part of the country’s fuel pricing template, consumption figures grew geometrically from below 30 million litres per day to almost 60 million litres.
On February 7, 2017, the Minister of State for Petroleum Resources, Ibe Kachikwu, told a House of Representatives committee that daily consumption of petrol was 28 million litres.
The minister said the figure dropped from about 50-55 million litres a day.
Minister of state for petroleum resources, Dr. Ibe Kachikwu had on several occasion, said importation of petroleum would not stop until the refineries are put to optimal use.
However, the government seemed to have shifted focus from revamping the refineries to encouraging investors on modular refineries.
Kachikwu had also said the four refineries are battling with obsolete equipment and are unable to take crude oil for refining into finished products.
Dr Rabiu Bello, the NNPC Chief Operating Officer Upstream, in May, revealed there was a period one of the refineries “did not work for 28 months”, declining to mention which one among the four.
Although the NNPC had admitted that the refineries are not working optimally, it said it relies on completion of the Dangote 650, 000pbd refinery to cushion the effect of underperformances by the refineries.
The Dangote refinery will come on stream in 2020.