By Teddy Nwanunobi
The latest report from the Nigerian National Petroleum Corporation (NNPC) reveals that Nigeria’s four refineries lost a combined total sum of N177.21 billion for being idle from July 2019 to January 2021.
Valuechain reports that Nigeria’s four refineries are located in Port Harcourt in Rivers State (two), Warri in Delta State (one) and Kaduna State (one).
According to the report, the Kaduna Refining and Petrochemical Company Limited only processed crude in one month (June); the Port Harcourt Refining Company Limited only processed in two months (February and March); and the Warri Refining and Petrochemical Company Limited only processed in four months (January, February, March and May) – all in 2019.
The data also revealed that the Kaduna Refinery incurred an operating deficit of N64.84 billion, the Port Harcourt Refinery lost N57.07 billion, while the Warri refinery lost N55.30 billion – all the losses occurred from July 2019 to January 2021.
“The declining operational performance is attributable to ongoing revamping of the refineries, which is expected to further enhance capacity utilisation once completed,” the NNPC said in its latest monthly report.
In January 2021, 1.68 billion litres of premium motor spirit (PMS), also known as petrol, were supplied into the country through the Direct Purchase Direct Sale (DPDS) arrangement as against the 1.58 billion litres of PMS supplied in the month of December 2020.
The refineries have a combined installed capacity of 445,000 barrels per day.
Sadly, they have continued to operate far below the installed capacity.
As a result, Nigeria largely depends on importation of refined petroleum products as its refineries have remained in a state of disrepair for many years despite several reported repairs.
Under the DSDP scheme, selected overseas refiners, trading companies and indigenous companies are allocated crude supplies in exchange for the delivery of an equal value of petrol and other refined products to the NNPC.
It would be recalled that early this month, the NNPC and Maire Tecnimont S.p.A. (an Italy-based company) signed the engineering, procurement and construction contract for the rehabilitation of the refinery.
This was sequel to the approval in March by the Federal Executive Council (FEC) of the plan by the Ministry of Petroleum Resources to rehabilitate the Port Harcourt Refinery with the sum of $1.5 billion.
The project entails EPC activities for a full rehabilitation of the Port Harcourt refinery complex, aimed at restoring the complex to a minimum of 90 per cent of its nameplate capacity.
Maire Tecnimont said the project would be delivered in phases, from 24 and 32 months, while the final stage would be completed in 44 months from the award date.