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Dormant Refineries Post Losses in Nine Consecutive Months

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  • Dormant Refineries Post Losses in Nine Consecutive Months

The fortunes of Nigeria’s refineries have continued to plummet as the plants posted losses for nine consecutive months, the Nigerian National Petroleum Corporation has said.

Findings from NNPC’s latest monthly financial and operations report showed that the refineries recorded continuous monthly losses from May 2018 to January 2019.

The refineries include Warri Refining and Petrochemical Company, Kaduna Refining and Petrochemical Company and Port Harcourt Refining Company.

Further analysis of NNPC’s January 2019 report showed that since January 2018, only the WRPC was able to make profits in February (N129.91m) and April 2018 (N575.16m).

From January 2018 to January 2019, the KRPC and the PHRC only made a profit in April 2018, as all the refineries started losing money on a monthly basis beginning from May last year.

Further analysis of the report showed that the KRPC posted the highest loss of N3.74bn for January 2019, as it stayed dormant and failed to refine any crude oil from February 2018 to January this year.

The PHRC recorded N2.11bn loss in January 2019 and the refinery was idle from July 2018 to January this year, as it could not refine a drop of crude in the seven months.

Also, the WRPC lost N2.51bn in January 2019, but the report showed that of the country’s three refineries managed by the NNPC, only Warri refinery was able to process some volumes of crude oil from January 2018 to January this year.

Our correspondent observed that between January 2018 and January 2019, the WRPC only recorded zero capacity utilisation in January, September and October, in 2018.

In January this year, the Warri refinery processed 104,459 metric tonnes of crude and posted a capacity utilisation of 19.76 per cent.

It was also observed that the consolidated loss of the refineries for January 2019 alone was N8.36bn.

The NNPC stated in the report that it had been adopting a merchant plant refineries business model since January 2017.

It said, “The model takes cognizance of the products worth and crude costs. The combined value of output by the three refineries (at import parity price) for the month of January 2019 amounted to N33.69bn, while the associated crude plus freight costs and operational expenses were N31.58bn and N10.47bn respectively.

“This resulted to an operating deficit of N8.36bn by the refineries.”

President Muhammadu Buhari government had promised to increase the performance or output of the nation’s refineries to about 90 per cent by 2019. But this did not materialise during the first term of the President, which elapsed on May 29, 2019.

In May 2017, the erstwhile Minister of State for Petroleum Resources, Dr Ibe Kachikwu, while speaking as a guest on BBC Hard Talk in London, vowed to resign if the country failed to attain self-sufficiency in the refining of petroleum products by 2019.

When asked to state the year that Nigeria would be self-sufficient in refining petroleum products, Kachikwu replied, “I have said 2019, and that is the target that I gave.”

On whether he would leave office if he failed to achieve the target, the minister replied, “Yes, of course. That is the reason why you are in government.”

The former minister, during the interview, revealed that the government’s target was to get the refineries working at 90 per cent operational capacity.

“Those refineries were down before the President came. Since coming, we’ve been able to get them back to produce seven million litres versus zero.

“That’s not the 90 per cent template but we’re now refurbishing the refineries.”

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

FG Plans to Build 10 New Airports in Anambra, Benue, Others – Aviation Minister

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Buhari in Port Harcourt

Aviation Minister Says FG Working on Building 10 New Airports

The Minister of Aviation, Hadi Sirika, on Tuesday, said the Federal Government plans to build 10 airports across the country to improve civil aviation.

The minister made the statement while defending his ministry’s 2021 budget proposals.

Sirika said President Muhammadu Buhari has done justice to the aviation ministry through the ongoing framework and implementation.

He said the administration would construct new airports in Anambra, Benue, Ekiti, Nasarawa, Ebonyi and Gombe States.

He further stated that airports in Kebbi, Osubi and Dutse have been taken over for redevelopment by the Federal Government.

Sirika said, “Consequent upon that roadmap, we have seen aviation grow in 2018 to become the second-fastest-growing sector of the economy.

“Also and by 2019, it became the fastest-growing sector of the economy and increased its GDP contribution.

“From 2015 till now, we’ve seen a lot of growth in civil aviation, the number of airports is increasing.

“So far, about seven airports have been added to the map, some of them completed, some of them under construction.

“There are airports coming up in Benue, Ebonyi, Ekiti, Lafia, Damaturu, Anambra and so on.

“All these show that civil aviation is growing during this administration.

“So, we have about 10 new airports coming up, that is almost half the number of airports we used to have in Nigeria.

“We are adding 50 per cent of the number of airports,” the minister added.

Sirika noted that Nigeria Air, the proposed national carrier, was part of the new roadmap and could be delivered before 2023.

He said, “We are on it. The transaction adviser has brought in the outline business case.

“It is being reviewed by Infrastructure Concession Regulatory Commission, Soon after it finishes, it will go to the Federal Executive Council and it will be approved.

“We will not leave this government without having it in place.”

He defended why Lokoja, Kogi State needs another airport, saying it is an alternative to the Nnamdi Azikiwe International Airport in Abuja.

He said, “Lokoja is an important northern town. It is a cosmopolitan town, it’s a mini Nigeria and it is extremely very important in growth and development of our country.

“We have a lot of agricultural activities there. There is fishery, there is perishable item production and so on.

“So, establishing an airport there is quite apt. For me, it is something we should have done long ago for its importance.”

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Economy

FG Says Over N6 Billion Disbursed to Poor Households in Zamfara

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Over N6 Billion Disbursed to Poor Households in Zamfara

The Federal Government said it has disbursed over N6 billion under the Conditional Cash Transfer (CCT) scheme to poor households in six out of the 14 local governments in Zamfara in 2020.

The Minister of Humanitarian Affairs, Disaster Management and Social Development, Hajiya Sadiya Umar-Farouk disclosed this on Tuesday during the flag off of Grant for Rural Women Project in Gusau.

The minister said the CCT program was created in 2016 to address the deficiencies in capacity and lack of investment in human capital of poor and vulnerable households.

The programme is designed to deliver timely and accessible cash transfers to beneficiary households.

“And sets to support development objectives and priorities, to achieve improvement in health and nutrition, school enrolment and retention, environmental sanitation and empowerment among others,” she explained.

Umar-Faruk said a total of 130,000 beneficiaries from Anka, Bungudu, Birnin Magaji, Kaura Namoda, Tsafe, and Talata Mafara local government areas received between N30,000 to N80,000, depending on the dates the beneficiary enrolled in the programme.

Speaking on the grant for Rural Women, the minister said the programme was introduced to deepen the social inclusion agenda of President Buhari administration that includes lifting 100 million Nigerians out of poverty in 10 years.

It is designed to provide a one-off grant to some of the poorest and most vulnerable women in rural Nigeria.

“A grant of N20,000 will be disbursed to over 150,000 poor rural women across the 36 states of the federation,” she said.

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Economy

Delta State Gov Okowa Presents N378.48 Billion Budget for 2021

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Ifeanyi Okowa Presents N378.48 Billion Proposed Budget for 2021

The Executive Governor of Delta State, Senator (Dr) Ifeanyi Okowa, on Tuesday presented a N378.48 billion budget to the state’s House of Assembly for consideration for the 2021 fiscal year.

The budget christened “Budget of Recovery” appropriated N207.52 billion for Capital Expenditure while Recurrent Expenditure was allocated N171.32 billion.

According to the Governor, capital expenditure accounted for 54.76 percent of the budget while 45.24 percent represented recurrent expenditure.

He explained that the allocations were in line with his administration’s agenda of spending more on projects and programmes that would impact positively on the socio-economic well-being of the people of Delta.

The proposed budget for 2021 is N96.2 billion or 34.05 per cent more than the N282 billion approved for 2020.

The governor said that the 2021 budget proposals reinforced the state government’s commitment to road infrastructure, education, health, job and wealth creation programmes as the principal-drivers of the Stronger Delta agenda.

According to him, N113 billion, representing 89.94 per cent of the capital budget is allocated to the economic sector while N35 billion is allocated to the social sector; the administration sector got 10.93 billion and the regional sector, N42 billion.

“In 2021, we propose to spend N66.66 billion on Road Infrastructure; N6.79 billion on Health; Education will gulp N23.55 billion; Agriculture, N2.04 billion and Water Sector, N1.83 billion.

“Job and Wealth Creation Bureau will gulp N1 Billion and Youth Development, N1.25 billion. These key sectors are very essential in our 2021 budget,” Okowa said.

Okowa also explained that due to the negative impact of COVID-19 on the economy and the world at large, government spending was significantly affected by the global pandemic and that Delta was no exception.

The governor, therefore, stated that “the proposed 2021 Budget for Delta is primarily focused on protecting and supporting our people in a COVID-19 environment, accelerating infrastructural renewal, incentivizing growth, enhancing job creation, engendering social inclusion and developing sustainably.

“Overall, the proposed 2021 Budget is predicated on inclusive economic growth that is sustainable and people-centred, with strengthening fiscal sustainability through increased efficiency in spending, improved revenue mobilization and debt sustainability.

“It also entails improving processes and systems in Public Financial Management, and Monitoring and Evaluation, to bolster better public sector service delivery.”

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