The promise game over Nigeria’s problematic refineries has begun, again, as the Minister of State, Petroleum Resources, Heineken Lokpobiri, has said the Port Harcourt Refinery would resume production by December with a target of 54,000 to 60,000 barrels of refined petroleum products per day.
On Friday, Lokpobiri repeated the oft-promise Nigerians have heard over and over again, before a return to the moribund state of the refineries, while nearly two thousand staff in the plants continue to receive tens of billions of Naira without any production.
A lack of Refining capacity has ensured that Nigerians pay as much as N700 per litre of Premium Motor Spirit (PMS – Petrol in local parlance), making the country notorious as the only OPEC member that refines its crude oil outside its shores. This has led to unprecedented inflation and hardship in the country.
Exactly a year ago, reports in media indicated that the Nigerian National Petroleum Company Limited (NNPC) left over N136 billion as operational deficits across its three refineries in Kaduna, Port Harcourt and Warri.
With these liabilities, the NNPC proceeded to become an investor in a private concern, the Dangote Refinery in Lagos, which is also running a little late on its promise of flooding the market with refined products.
The NNPC shut down the 445,000-capacity refineries In Port Harcourt, Warri, and Kaduna for over two years, yet kept the over 1,701 staff at the facilities, as it rehabilitates the Port Harcourt refinery for $1.5 billion and those of Warri and Kaduna for $1.4 billion.
The Guardian reported that in August 2020, the total losses incurred by the refineries was N7,088 billion, it was N7,043 billion in September of the same year before moving to N5,489 billion in October. In November 2020, it went up to N5,995 billion and went further up to N8,279 billion in December that year.
In January 2021, the operational deficit was N5,371 billion, February recorded an N6,879 billion loss, N3,866 billion in March, N3,544 billion in April, and N5,243 billion in May, N4,014 billion in June, N3,752 billion in July and N3,819 billion in August 2021.
On average, NNPC spends, plus or minus, N68 billion in paying salaries and other expenses at the moribund refineries, yearly. In the last two years, the losses have amounted to an average of N136 billion.
The NNPC Chief Executive Officer, Mele Kyari, in November 2020, said the refineries were shut down, because their operations were no longer sustainable, while the overheads remained a snag on the books of the company, which is aiming to quickly return to profitability after years of loss-making.
As of 2021, NNPC had 7,338 staff, 1,701 of the workers were at the Kaduna, Port-Harcourt and Warri refineries.
About 660 staff, representing 8.99 per cent of the company’s total workforce are at the Kaduna Refining and Petrochemical Company (KRPC), and 506 are at the Port Harcourt Refining Company (PHRC) and 437 are at Warri Refining and Petrochemical Company (WRPC).
Recall that the Federal Government had approved $1.5 billion to rehabilitate and upgrade the Port Harcourt refinery complex in March 2021. The key contract for the refinery modernisation was also awarded the same month, while that of Kaduna and Warri were approved but yet to commence.
But on Friday, Lokpobiri on an inspection tour of the Port Harcourt refinery said the first phase of work had been relatively achieved and would commence production by the end of the year.
“The essence of this inspection is to know the extent of work done on the Port Harcourt Refinery, and we are satisfied with what we have seen.
“From what we have seen here, the first phase will come on stream by the end of 2023 with about 54,000 to 60,000 barrels per day production.
“Warri will start by first quarter of next year with about 70,000 barrels per day and Kaduna will come on stream towards the end of next year.
“If we add all that to Dangote refinery, we will be able to stop fuel importation, start saving substantial part of our funds and Nigerians will also begin to have the benefits of full deregulation,” he said.
He added that his team will be inspecting all refineries in the country and the objective is to ensure that in the next few years, Nigeria will stop fuel importation.
Lopkobiri also disclosed that the entire Port Harcourt Refinery would be fully rehabilitated by the end of 2024.
