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Refineries Get N162bn Crude Oil in Eight Months

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refineries
  • Refineries Get N162bn Crude Oil in Eight Months

Three of the four refineries in Nigeria have continued to receive high volumes of crude oil valued at billions of naira every month since the beginning of this year, despite their abysmal performance either individually or collectively.

Findings on Friday showed that although the three facilities got no crude delivery in the fourth quarter of 2015, they started receiving high quantity of crude oil in January 2016.

The refineries are the Kaduna Refining and Petrochemical Company in Kaduna State; Port Harcourt Refining Company in Rivers State; and Warri Refining and Petrochemical Company in Delta State.

The latest financial and operations report of the Nigerian National Petroleum Corporation for September 2016, which was obtained by our correspondent in Abuja on Friday, showed that between January and August, the country’s refineries received a total crude volume of 16.468 million barrels valued at N162.6bn.

Despite receiving such huge volumes of crude during the period, the facilities still performed below standard as the corporation admitted that the refineries’ combined performance was abysmal.

Analysis showed that the largest crude delivery in volumes to the refineries during the eight-month review period was done in August 2016, as the facilities got 3.282 million barrels of crude oil valued at N48.901bn.

On the other hand, the lowest crude delivery to the facilities was done in January 2016, as the combined crude oil receipt for that month was 502,450 barrels worth N2.726bn.

In one of its comments on the performance of the refineries, the NNPC said, “For the month of September 2016, the three refineries produced 139,724 metric tonnes of finished petroleum products and 74,885MT of intermediate products out of 252,897MT of crude processed at a combined capacity utilisation of 13.89, compared to 19.09 per cent combined capacity utilisation achieved in the month of August 2016.

“The abysmal performance was due to crude pipeline vandalism in the Niger Delta region and the three refineries continue to operate at minimal capacity.”

Industry stakeholders, observers and experts on several occasions had called for the privatisation, concession or outright sale of the Nigeria’s refineries.

Last week, the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, raised the alarm that the refineries could end up as scrap in 2019 once the Africa’s richest man, Alhaji Aliko Dangote, began processing crude oil at his refinery in Lagos.

Kachikwu, who spoke at the stakeholders’ consultative forum in Abuja, said, “Refineries will have to work; it is really not an option anymore. And not only should it work, it has to work very quickly. The reality is that if we do not privatise and we do not support concession, which is not what we are doing, then we have a responsibility to find private capital to get them to where they should be.

“This is because if we do not get them to work, in 2019, I can assure you that if Dangote system works well, we would have scrap; we won’t have refineries because by then, it would be too late to do anything.”

Stakeholders in the oil and gas sector had stated in the draft National Oil Policy 2016 that the refining capacity of Nigeria’s refineries was one of the smallest in the world, putting it at about 14 per cent against a global average capacity utilisation of 90 per cent.

In the draft document, which was obtained by our correspondent from the Ministry of Petroleum Resources, the stakeholders said, “The midstream consists of three refineries, petroleum product storage depots, onshore oil and gas pipelines, and four terminals (all government-owned subsidiaries of the NNPC).

“Despite being one of the leading crude oil producing nations in the world, Nigeria’s refining capacity is one of the smallest. The capacity utilisation has fallen to just 14 per cent in 2014, against a global average capacity utilisation of 90 per cent. A strong commercially viable and significant refining sector is an essential part of the Nigerian Petroleum Policy.”

They noted that on a per capita basis, Nigerian refining capacity (theoretical maximum capacity, which was far higher than actual current operational capacity) was one of the lowest, even among other African countries.

Outlining the per capita performances of some refineries in Africa, the stakeholders stated that Libya had 6.17 barrels per day/capita; Algeria, 1.37 bpsd/capita; South Africa, 1.11 bpsd/capita; Egypt, 0.96 bpsd/capita; and Nigeria, 0.3 bpsd/capita.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Economy

COVID-19: CBN Has Disbursed N83B Loans to Healthcare Sector

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CACOVID

The Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, yesterday, said the central bank had disbursed over N83.9 billion to pharmaceutical and healthcare practitioners in the country since the outbreak of the COVID-19 pandemic in the country.

Also, Lagos State Governor, Mr. Babajide Sanwo-Olu, has stressed the need for a slash in the cost of governance in the country, saying a lot more resources could be dedicated towards healthcare and critical infrastructure.

They both said this yesterday, at the premiere of ‘Unmasked’, a documentary on Nigeria’s response to the pandemic held in Lagos.

Emefiele, who was represented by the CBN’s Director of Corporate Communications, Osita Nwasinobi, explained: “Building a robust healthcare infrastructure was also vital from a security perspective, as some nations had imposed restrictions on the exports of vital medical drugs as well as the use of drug patents that could aid in containing the spread of the pandemic.

“As a result, we focused our interventions in the healthcare sector on three areas. Building the capacity of our healthcare institutions supporting the domestic manufacturing of drugs by businesses, and providing grants to researchers in the medical field, in order to encourage them to develop breakthrough innovations that would address health challenges faced by Nigerians.

“In this regard, we disbursed over N83.9 billion in loans to pharmaceutical companies and healthcare practitioners, which is supporting 26 pharmaceutical and 56 medical projects across the country. We were also able to mobilise key stakeholders in the Nigerian economy through the CACOVID alliance, which led to the provision of over N25 billion in relief materials to affected households, and the set-up of 39 isolation centres across the country. These measures helped to expand and strengthen the capacity of our healthcare institutions to respond to the COVID-19 pandemic.”

According to the CBN Governor, the banking sector regulator also initiated the Healthcare Sector Research and Development Intervention Grant Scheme, which was to aid research on solutions that could address diseases such as COVID-19, and other communicable/non-communicable diseases.

He said so far, five major healthcare-related research projects were being financed under the initiative.

Speaking further on the call to increase access to health insurance, Emefiele said: “One key aspect which we would have to address is improving access to healthcare for all Nigerians. A key factor that has impeded access to healthcare for Nigerians is the prevailing cost of healthcare services.

“According to a study by World Health Organisation (WHO), only four percent of Nigerians have access to health insurance. Besides food, healthcare expenses are a significant component of average Nigeria’s personal expenditure.

“Out of pocket expenses on healthcare amount to close to 76 percent of total healthcare expenditure. At such levels of health spending, individuals particularly those in rural communities may be denied access to healthcare services.

“Expanding the insurance net to capture the pool of Nigerians not covered by existing health insurance schemes, could help to reduce the high out of pocket expenses on healthcare services by Nigerians. It will also help to increase the pool of funds that could be invested in building our healthcare infrastructure and in improving the existing welfare package of our healthcare workers.”

“The private sector has a significant role to play in this regard given the decline in government revenues as occasioned by the drop in commodity prices. Leveraging innovative solutions that can provide insurance services at relatively cheap prices could significantly help to improve access to healthcare for a large proportion of Nigerians particularly those in our rural communities.”

According to Emefiele, the CBN remains committed to working with all stakeholders in improving access to finance and credit that would support the development of viable healthcare infrastructure in our country.

On his part, Sanwo-Olu said: “What are the lessons that we have learned with the Covid-19? Looking at all the things that Covid-19 has cost us, how are we preparing ourselves?

“The truth be told the structure of our governance system needs to change particularly the cost of governance. We need to speak up and ask ourselves are we ready to change.”

“When it gets to the election it is the same set of people that will come up and people don’t come out to vote and we end up having 20 percent out of 100 percent that will elect those that will govern. So, the change has to be about all of us. That is how the real change that will help us will come,” he added.

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Economy

Emefiele Says CBN Will Resist All Attempts to Continue Maize Importation

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Farm input

The Central Bank of Nigeria (CBN) has vowed to resist all attempts to continue the importation of maize into the country.

Godwin Emefiele, the governor, CBN, in a statement titled ‘Emefiele woos youths to embrace agriculture’, said: “the CBN would resist attempts by those who seek to continually import maize into the country.”

Emefiele, who spoke in Katsina during the unveiling of the first maize pyramid and inauguration of the 2021 maize wet season farming under the CBN-Maize Association of Nigeria Anchor Borrowers’ Programme, said maize farmers in the country had what it takes to meet the maize demand gap of over 4.5 million metric tonnes in the country.

With over 50,000 bags of maize available on this ground, and others aggregated across the country, maize farmers are sending a resounding message that we can grow enough maize to meet the country’s demand,” Emefiele said.

He explained that the maize unveiled at the ceremony would be sold to reputable feed processors.

He added that this would in turn impact positively on current poultry feed prices, as over 60 per cent of maize produced in the country were used for producing poultry feed.

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Economy

Nigeria’s Spending Structure Unsustainable, Budget Head Says

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interbank

Nigeria’s current trend of spending more money on running the government than on building new infrastructure is unsustainable, the country’s top budget oversight official said.

Low revenue collection and high recurrent costs have resulted in actual capital expenditure below two trillion naira ($4.88 billion) a year for a decade, Ben Akabueze, director-general of the Budget Office, said Tuesday in a virtual presentation.

“Hence, the investments required to bridge the infrastructure gap are way beyond the means available to the government,” Akabueze said. Recurrent spending, allocated towards salaries and running costs, has accounted for more than 75% of the public budget every year since 2011, he said.

Africa’s largest economy requires at least $3 trillion of spending over the next 30 years to close its infrastructure gap, Moody’s Investors Service said in November. The country’s tax revenue as a proportion of gross domestic product is one of the lowest globally, according to the International Monetary Fund.

“Huge recurrent expenditure has constrained the provision of good roads, steady power supply, health care services, quality education and quality shelter,” Akabueze said.

Nigeria should amend its constitution to create six regions to replace the existing 36 states, which each have their own governments, Akabueze said. The country also needs to reduce the number of cabinet ministers to a maximum of 24 from more than 40 and cut federal ministries to fewer than 20 from the current 27, he said.

“No country can develop where a large part of its earnings is spent on administrative structures rather than on capital investment,” Akabueze said.

 

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