The Nigerian National Petroleum Corporation (NNPC) has confessed that refineries in Nigeria processed almost no crude oil in the 13 months to June end, despite huge costs incurred in repairs.
The national oil company said that during the same period, operating costs for the country’s four main oil refineries, which the NNPC has shuttered pending revamps, totaled $367 million.
The data, which the NNPC released last Thursday in Abuja, blamed the inactivity to rehabilitation work going on in the refineries.
“No white product (Premium Motor Spirit and Dual Purpose Kerosene) was produced in June 2020 and apparently for the past 12 consecutive months.
“The lack of production is due to ongoing rehabilitation works at the refineries,” the report said.
NNPC had announced in April that it had closed all its oil refineries as it works to secure funding and a model to upgrade them, adding that when the Kaduna, Port Harcourt and Warri refineries are revived, they would no longer be managed by the company.
Observers noted that the refineries have only worked sporadically due to underinvestment and the country faces an uphill battle to sell its oil abroad due to hollowed out demand from the coronavirus pandemic and abundant oil in global markets.
Almost all of Nigeria’s domestic fuel comes in to the country courtesy of an agreement between Nigeria and independent oil merchants who swap the nation’s crude oil for fuels, dubbed direct sale, direct-purchase (DSDP).
Just under 40,000 megatons of crude was the only oil processed by the country in the reporting period, the report added, only two percent of the country’s refining capacity.
“The declining operational performance is attributable to ongoing revamping of the refineries which is expected to further enhance capacity utilization once completed,” the NNPC report said.
By Chibisi Ohakah, Abuja
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