Nigeria’s local refineries record N14bn deficit

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Nigeria’s refineries, Port Harcourt Refining Company, PHRC; Warri Refinery and Petrochemical Company, WRPC; and Kaduna Refining and Petrochemical Company, KRPC, recorded an operating deficit of N13.59 billion in January 2018, worsening further from the N11.09 billion deficit recorded in December 2017.

The Nigerian National Petroleum Corporation, NNPC, in its January 2018 Monthly Financial and Operations Report, said this was irrespective of its adoption of a Merchant Plant Refineries Business Model since January 2017, which takes cognizance of the products worth and crude costs.

According to the report, the combined value of output by the three refineries, at import parity price, for the month of January 2018 amounted to N26.18 billion while the associated crude plus freight costs and operational expenses were N28.88 billion and N10.88 billion respectively.

“Also, during the period under review, refineries combined capacity utilization was 10.89 per cent,” the report noted.

The report noted that total crude processed by two domestic refineries, KRPC and PHRC, for the month of January 2018 was 204,877 metric tonne (MT), adding that PHRC accounted for 183,022 MT while a total of 21,855 MT was processed by KRPC.

According to the report, this translated to a combined yield efficiency of 89.97 per cent as against the 88.99 per cent in December 2017.

Also, the report pointed out that for the month of January 2018, the two Refineries produced 154,676 MT of finished petroleum products and 29,661 MT of intermediate products out of the 204,877 MT of crude processed at a combined capacity utilization of 10.89 per cent compared to 26.99 per cent combined capacity utilization achieved in the month of December 2017.

“The decrease in operational performance recorded is attributable to the decrease in crude processed by PHRC and KRPC. The ongoing revamping of the Refineries will enhance capacity utilization once completed,” the NNPC stated.

Furthermore, the NNPC stated that in the downstream sector, products hoarding and diversion remained the challenge of fuel supply shortages witnessed recently in some parts of the country in the month under review.

The NNPC said, “This is evident with the interception of smuggled 276 Kegs of Petrol, nine drums and 32 kegs of diesel and five drums of kerosene by the Nigeria Customs Service (NCS) in Ogun State and arrest of eight trucks laden with a total of 469,000 litres of PMS in Niger State by Nigeria Security and Civil Defense Corps (NSCDC) on their way to Babana, a border town between Nigeria and Republic of Benin.

The report also declared that in January 2018, a total of 194 pipeline points were vandalized, 22 pipeline points either failed to be welded or ruptured/clamped.

“Thus, 216 pipeline points were destroyed for the month under review as against the 176 points recorded in the previous month. Port Harcourt – Aba and Aba-Enugu pipeline segment accounted for 187 points or 86.57 per cent of the affected pipeline points,” the report averred.

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