Nigeria’s 3 Refineries Incur N111bn Loss In 9 Months
Nigeria’s three moribund refineries are ran a loss totaling N111.27 billion between January and September 2019, a report from the Nigerian National Petroleum Corporation (NNPC) has said in its September report. The report noted that the refineries posted a loss of N96.31 billion in the same period in 2018.
Owned wholly by the federal government of Nigerian, the refineries are located in Port Harcourt, Kaduna and Warri, and have a combined installed capacity of 445,000 barrels per day. However for over two decades, the refineries have been moribund and have continued to operate far below the installed capacity.
The report said collectively the refineries lost N8.362 billion in January; N10.26 billion in February; N16.04 billion in March; N11.44 billion in April; N13.63 billion in May, and N17.42 billionn in June. It said the plants recorded a loss of N13.84 billion in July; N13.21 billion in August and N7.07 billion in September.
The report stated that the Kaduna refinery did not process any crude in eight months, and therefore lost N44.06 billion. On the other hand, the Warri refinery was recorded as losing N33.88 billion, having not processed any crude oil in April, June, July, August and September.
Port Harcourt refinery posted a loss of N33.31bn as it was idle in January, April, May and June, July, August and September. “Similar to August 2019, no white product (petrol and kerosene) was produced in September 2019. The lack of production is due to ongoing rehabilitation works at the refineries,” the corporation said.
The NNPC said it had been adopting a merchant plant refineries business model since January 2017. It said the combined value of output by the three refineries (at import parity price) for September amounted to N1.03 billion.
“No associated crude plus freight cost for the three refineries since there was no production while operational expenses amounted to N11.24 billion. This resulted in current operating deficit of N10.20 billion and an adjusted deficit of N7.07 billion by the refineries; after adjusting for prior overstated deficits by PHRC,” the NNPC said
Nigeria 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.
By Chibisi Ohakah