The Nigerian National Petroleum Corporation (NNPC) has reported a N473.3 billion operating loss on three idle refineries in Warri, Port Harcourt, and Kaduna in the last six years.
This was revealed in a new report published by SBM Intelligence, a Lagos-based research firm. According to the report titled operating moribund refineries, the losses by NNPC occurred between January 1, 2015 to February 2021.
“In that time, only 6.73 per cent of their capacity has been utilised on average. In fact, none of the three refineries has produced a drop of refined petrol since July 2019, racking up over N185bn in losses,” the report stated
Breakdown of the operating losses incurred according to the firm showed that a N56.9 billion operating loss was recorded in 2015 and N5.5 billion in 2016.
The operating loss increased in 2017 to N32.8 billion and again to N126.2 billion in 2018.
In 2019, despite the refineries reporting no fuel, N148.9 billion operating cost was reported.
In 2020 also no fuel but a loss of 101.6 billion was recorded.
So far in the first two months of 2021, the refineries have recorded a cumulative operating loss of N12.2 billion.
“And yet, there’s no sign of the expenditure slowing down. In March, the Federal Executive Council approved the sum of $1.5bn for the rehabilitation of the Port-Harcourt refinery,” the report continues.
“Nigeria must count the cost, not only of spending scarce resources on refineries that had not reached more than 30 per cent capacity in over six years but also of the income foregone from not privatising them,” SBM advised.