Nigeria’s four refineries have not made profit in 13 months

Nigeria’s four refineries under the management of the Nigerian National Petroleum Corporation have not made any profit since May 2018.

Instead, the refineries posted losses consecutively between May last year and May this year.

The country’s refineries comprise Warri Refining and Petrochemical Company, two plants at Port Harcourt Refining Company and Kaduna Refining and Petrochemical Company.

Latest data obtained from the NNPC on Monday showed that the WRPC, the KRPC and the PHRC ran deficits for 13 straight months, as they recorded no operating surplus.

A further analysis of the performance of the refineries showed that they recorded the highest consolidated loss of N20.1bn in the month of May 2018, as this dropped to N13.63bn in May this year.

It was also observed that the losses of the WRPC and the PHRC dropped from N7.16bn and N8.69bn in May 2018 to N4.6bn and N4.7bn in May 2019, respectively.

The losses incurred by the KRPC, on the other hand, moved up marginally during the period under review, as it climbed from N4.22bn in May 2018 to close at N4.31bn in May 2019, according to the latest figures from the NNPC.

The NNPC further stated that in May 2019, the three refineries processed 32,967 metric tonnes of crude to produce 21,347MT for the month as against zero quantity processed in April 2019.

It noted that only the WRPC produced the finished petroleum products of 21,347MT in May 2019.

The combined yield efficiency for the month under review was 91.29 per cent compared to zero per cent recorded in April 2019, owing largely to rehabilitation work needed to be carried out in the refineries.

“The KRPC has not processed any crude over the past couple of months,” the NNPC said.

For the month of May 2019, the WRPC and the KRPC produced 4,771MT and 3,977 of intermediate products, respectively, while the three refineries produced 8,748MT of intermediate at 1.75 per cent combined capacity utilisation.

“The lower operational performance recorded is attributable to the ongoing revamping of the refineries which is expected to further enhance capacity utilisation once completed,” the NNPC stated.

It further stated that the corporation had been adopting a merchant plant refineries business model since January 2017.

It explained that the model took cognizance of the products worth and crude costs, adding that the combined value of output by the three refineries at import parity price for the month of May 2019 amounted to N5.24bn.

The corporation added that the associated crude plus freight costs and operational expenses were N5.3bn and N13.57bn, respectively, adding that this resulted in an operating deficit of N13.63bn by the refineries.