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Business News of Thursday, 26 March 2020

Source: Punch

NNPC spent N218.18bn on ailing refineries in 2019

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Nigeria’s refineries under the management of the Nigerian National Petroleum Corporation incurred a total expense of N218.18bn in 2019.

The refineries, namely Kaduna Refining and Petrochemical Company, Port Harcourt Refining Company and Warri Refining and Petrochemical Company, recorded a cumulative loss of N149.23bn last year.

Nigeria, Africa’s top oil producer, 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.

The refineries, which are located in Port Harcourt, Kaduna and Warri, have a combined installed capacity of 445,000 barrels per day but have continued to operate far below the installed capacity.

Figures obtained from the NNPC in Abuja on Wednesday showed that the refineries recorded cumulative revenue of N68.96bn but jointly incurred a total expense of N218.18bn during the year under review.

It had projected total revenue of N309.14bn and an expense of N377.35bn for the facilities in 2019, but the projection did not materialise.

The corporation had projected a loss of N68.21bn for the three refineries in 2019, but the facilities posted an actual loss of N149.23bn, which was N81.02bn higher than the oil firm’s projection.

On an individual basis, the three refineries recorded losses during the review period, as the KRPC posted the highest loss of N58.96bn.

The PHRC and the WRPC lost N44.77bn and N45.49bn respectively during the 12-month period.

Further findings showed that the facilities recorded losses in some consecutive months last year, as they performed poorly in terms of revenue generation and crude oil refining.

In November and December 2019, for instance, the refineries posted consecutive cumulative losses of N12.52bn and N13.46bn.

Their joint expenses in November and December last year were N12.56bn and N13.55bn respectively, after garnering meagre cumulative revenues of N42m and N96m in the stated months respectively.

Our correspondent gathered that the NNPC had projected a cumulative monthly revenue of N25.76bn, an expense of N31.45bn and loss of N5.68bn for the refineries, but this was not so.

The refineries received crude oil in some of the months last year, as it was recently reported exclusively by Sunday PUNCH that the facilities got crude oil valued at N80.74bn.

The report specifically said a total of 4,084,560 barrels of crude oil valued at N80.74bn was supplied to the refineries for a period of 13 months despite the poor performance and dormancy of the facilities at various intervals.