Refineries lost N132bn in 2018, says NNPC

The operating deficit recorded by the nation’s refineries rose by 39 per cent to N132.5bn in 2018, compared to the previous year, data from the Nigerian National Petroleum Corporation showed on Tuesday.

The refineries posted a loss of N95.09bn in 2017, according to the NNPC data.

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 for many years.

Port Harcourt refinery, which did not process any crude oil in seven months, recorded the biggest loss of N59.96bn in 2018.

Kaduna refinery, which was idle for 11 months, lost N31bn while Warri refinery recorded a deficit of N41.71bn, according to the NNPC.

A total of N13.58bn was lost in January; N8.05bn in February; N11.88bn in March; N20.08bn in May; N14.51bn in June; N10.45bn in July; N10.79bn in August; N6.97bn in September, N9.32bn in October, N9.58bn in November and N17.31bn in December.

The refineries made a profit of N6.32bn in April for the first time in 10 months.

It was observed that Warri refinery was idle in January, September and October 2018.

The NNPC, in its monthly report released on Tuesday, said its group operating revenue for December stood at N731.88bn, N439.59bn higher than the previous month performance, while expenditure surged by N429.52bn.

It said, “This month’s revenue is far more than the budgeted revenue which resulted in a marked increase in trading surplus despite the drag in operating expenditure in the month.”

The corporation recorded a trading surplus of N12.13bn in December.

“This increased performance is attributable to NPDC’s higher revenue recorded during the period following NPDC continuous revenue drive, arising from recent average weekly production of 332,000bpd making the target of 500,000bpd for 2020 achievable. This also captured the updated previous months’ revenue and expense,” it said.

In January, the Petroleum and Natural Gas Senior Staff Association of Nigeria expressed its opposition to the current operating model for the nation’s refineries.

PENGASSAN described the model as unsustainable, calling for the adoption of the Nigeria LNG Limited’s business model “after the refineries must have been rehabilitated for them to yield better dividends to the nation’s economy.”

It also called on the government to increase local refining capacity and remove all observed encumbrances to full rehabilitation of all the four refineries.