The Nigerian National Petroleum Corporation (NNPC) says the country’s refineries lost ₦104.3 billion in 13 months while not processing any crude oil during the period.
NNPC – which is in charge of three refineries: Kaduna Refining and Petrochemical Company, Port Harcourt Refining Company, and Warri Refining and Petrochemical Company – dislosed this in a study of the revised consolidated refinery financial performance from February 2020 to February 2021.
The plants continued to lose money on a monthly basis, the report said.
During the 13-month period, the refineries’ monthly operational expenses exceeded their income, according to the corporation’s figures.
In February, March, April, May, June, July, August, September, October, November, and December 2020, the refineries posted consolidated losses of ₦9.36 billion, ₦10.3 billion, ₦9.69 billion, ₦9.55 billion, ₦10.23 billion, ₦9.1 billion, ₦7.1 billion, ₦7.04 billion, ₦5.49 billion, ₦5.99 billion, and ₦8.28 billion respectively.
According to the corporation’s most recent filing, their consolidated losses continued in 2021, coming in at ₦5.37 billion in January and ₦6.88 billion in February.
During the month of February 2021, no crude was processed by the three refineries due to ongoing refinery rehabilitation, so their combined yield efficiency was zero percent. The refineries are being renovated, thus resulting in declining operational performance, but once they are complete, the utilization of the refinery’s capacity will be improved.
The NNPC has been using a merchant plant refineries business model since January 2017, according to the corporation. According to the firm, the model took into account product value as well as crude expenses, noting that the total value of output by the three refineries (at import parity prices) was about ₦0.10 billion for February 2021.
It added that because no output was achieved in February 2021, crude plus freight costs for the three refineries were nil. However, operational expenditures were ₦6.68 billion.
