Lagos — State-oil firm, NNPC released N10 billion to fund operations of its three refineries in June despite a public outcry over reports that the facilities had gulped billions without refining a drop of petroleum product in recent months.
Statistics gathered from the Nigerian National Petroleum Corporation’s newly released monthly report for June disclosed that a total of N10.27 billion was expended on the three refineries in the month under review.
The Port-Harcourt Refining and Petrochemical Company Limited, PHRC can produce 210,000 barrels per day, Kaduna Refining and Petrochemical Company Limited, KRPC- 110,000 barrels per day while the Warri Refining Petrochemical Company Limited, WRPC has a 125,000 barrels per day production capacity.
In June 2020, the three refineries processed no crude and combined yield efficiency was put at 0.00% owing largely to on-going rehabilitation works in the refineries, yet, NNPC says “operational expenses amounted to N10.27billion”.
The Corporation has been adopting a Merchant Plant Refineries Business Model since January 2017. The model takes cognizance of the products worth and crude costs.
In view of the above, NNPC says the combined value of output by the three refineries (at Import Parity Price) for the month of June 2020 amounted to approximately ₦0.04billion.
Since there was no production, the report said there was no recorded associated crude plus freight cost for the three refineries, however, operational expenses amounted to ₦10.27billion. This resulted in an operating deficit of ₦10.23billion by the refineries.
“…the declining operational performance is attributable to ongoing revamping of the refineries which is expected to further enhance capacity utilization once completed.”
No white product (PMS & DPK) was produced by the refineries in June 2020 and apparently for the past twelve consecutive months, however, total white products supplied by NNPC in the month was put at 767,421,646.65 litres, according to the report.
The Corporation recently came under fire as a result of huge spending on the refineries- prominent among the expenses was payment of salaries to workers and directors despite the facilities inability to meet the country’s petroleum needs.
It is estimated that demand and consumption of petroleum products in Nigeria grows at a rate of 12.8% annually, however, the oil-dependent economy currently lacks capacity to meet the domestic need, and as a result, relies on importation to feed its over 200 million population.
Africa accounted for 3.4 percent of the total global active refining capacity in 2018. Refining capacity in Africa increased from 3,423 mbd in 2013 to 3,544 mbd in 2018 at an average annual growth rate (AAGR) of 0.7 percent.
Africa’s refining capacity is expected to increase from 3,544 mbd in 2018 to 7,841 mbd by 2023 at an AAGR of 15.9 percent, according to a recent report by GlobalData. Out of this, the total refining capacity of Nigeria in 2018 was put at 446 mbd, amounting to 12.6 percent contribution to Africa’s total refining capacity.