Refineries Gulp N218.18bn in Maintenance in 2019  Says NNPC

Dangote refinery
  • Refineries Gulp N218.18bn in Maintenance in 2019  Says NNPC

The Nigerian National Petroleum Corporation has said it spent a total sum of N218.18 billion maintaining the nation’s refineries in 2019.

The refineries that have been operating below capacity over the years continue to cost the nation almost the same amount allocated to the ministry of works and housing in 2020.

The three major refineries, Kaduna Refining and Petrochemical Company, Port Harcourt Refining Company and Warri Refining and Petrochemical Company, recorded a combined loss of N149.23 billion during the same year it incurred N218.18 billion as maintenance fee. Indicating that the nation is spending more on maintenance than it is generating from the three refineries despite having a cumulative installed capacity of 445,000 barrels per day.

From the report obtained from the corporation on Wednesday, the three refineries generated combined revenue of N68.96 billion during the year under review while the total expenses incurred stood at N218.18 billion. This was despite NNPC projecting total revenue of N309.14 billion and an expense of N377.33 billion for the year.

The facilities operated below expectations for most of the year, for instance, the corporation said the three facilities processed zero crude and produce negative finished products in November 2019.

“In November 2019, the three refineries processed no crude and produced -5031 metric tonnes of finished products; comprising -3052MT and -1979MT utilised by the WRPC and the PHRC respectively,” the NNPC stated.

It added, “Combined yield efficiency is 0.00 per cent owing largely to ongoing rehabilitation work in the refineries. For the month of November 2019, the three refineries produced 385MT of intermediate products at combined capacity utilisation of 0.00 per cent.

“The intermediate product was primarily used by the PHRC. The declining operational performance recorded is attributable to ongoing revamping of the refineries which is expected to further enhance capacity utilisation once completed.”

Experts have said Federal Government should stop spending huge amounts on the maintenance of the three dilapidated refineries and focus on building modern facilities or invest the amount on other viable projects.

The average amount spent on the refineries yearly is almost equivalent to the N262 billion budgeted for the ministry of works and housing in the 2020 national budget.

About the Author

Samed Olukoya
CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and, with over a decade long experience in the global financial market. Contact Samed on Twitter: @sameolukoya; Email: [email protected]

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