Abuja — The country’s three refineries — Port Harcourt Refining Company (PHRC), Kaduna Refining and Petrochemical Company (KRPC) and Warri Refining and Petrochemical Company (WRPC) —posted trading deficit of N58.736 billion combined in the first six months of 2020.
According to data obtained from the Nigerian National Petroleum Corporation’s (NNPC), Monthly Financial and Operations Reports for June 2020, this represented a slight improvement compared with N77.415 billion deficit in the first half of 2019.
According to the NNPC, the deficit was hinged on a revenue of N5.798 billion in the first half of 2020, compared to N66.352 billion in the same period in 2019; while it recorded expenditure of N64.534 billion in the period under review, compared with N143.768 billion in the same period in 2019.
Giving a breakdown of the performance of the refineries, the NNPC disclosed that Kaduna refinery recorded revenue of N5.567 billion, expenditure of N29.16 billion and trading deficit of N23.59 billion; PHRC recorded posted trading deficit of N18.445 billion, hinged on revenue of N45 million and expenditure of N18.49 billion.
In addition, WRPC recorded revenue of N186 million, expenditure of N16.88 billion and trading deficit of N16.69 billion.
The NNPC explained that no white product — Premium Motor Spirit (PMS), also known as petrol, and Dual Purpose Kerosene (DPK) — was produced in June 2020 and apparently for the past twelve consecutive months.
According to the corporation, in June 2020, the three refineries processed no crude and combined yield efficiency of the facfilities is 0.00 per cent, owing largely to on-going rehabilitation works in the refineries.
The NNPC added that the declining operational performance was attributable to ongoing revamp of the refineries which was expected to further enhance capacity utilisation once completed.
The NNPC revealed that it had been adopting a Merchant Plant Refineries Business Model since January 2017, noting that the model takes cognisance of the products worth and crude costs.
The corporation said: “The combined value of output by the three refineries (at Import Parity Price) for the month of June 2020 amounted to approximately N0.04 billion. No associated crude plus freight cost for the three refineries since there was no production but operational expenses amounted to N10.27 billion. This resulted to an operating deficit of N10.23 billion by the refineries.”
“In May 2020, NNPC lifted 5.112 million barrels of crude oil from the daily allocation for domestic utilization translating to an average volume of 170,429 barrels of oil per day in terms of performance. In order to meet domestic product supply requirement for the month of May 2020, the entire 5.113 million barrels were processed under the Direct-Sales- Direct Purchase (DSDP) scheme while no deliveries to the domestic refineries for processing.”