Home NEWSGOVERNMENT Redundant Refineries Incur Operational Deficit Worth N148 Billion

Redundant Refineries Incur Operational Deficit Worth N148 Billion

by InlandTown Editor
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Owing to the ongoing rehabilitation works in the Kaduna, Warri and Port Harcourt refineries, no crude was produced, consequently leading to zero percent yield efficiency; a report has stated.

As contained in the Nigerian National Petroleum Corporation (NNPC) Monthly Financial and Operations Report for June 2020, the refineries in Warri and Port Harcourt had zero production between June 2019 and June 2020, while the one in Kaduna utilized 8.4 per cent of its capacity in July 2019.

From the foregoing, the report explicates that in the space of 13 months, these three refineries have incurred a combined operation deficit of N148 billion. As a matter of fact, the total sum of operation expenses (OpEx) for Warri stands at N43bn while its counterparts in Port Harcourt and Kaduna accrued N47.2bn and N65.2bn respectively from total revenue of N10.4billion within the period.

The report assured that the operational performance and capacity utilization of these refineries in question will increase exponentially once the rehabilitation is completed.

Furthermore, it explained that the Corporation has been implementing a Merchant Plant Refineries Business Model since January 2017. It is for this reason that the model takes cognizance of the Products Worth and Crude Costs.

In terms of the combined value of output from these refineries at Import Parity Price, in the month of June, 2020 it amounted to approximately ₦0.04billion. In addition, there has been no associated crude or freight cost for the three refineries.

The operational expenses for the month of June stands at to ₦10.27billion, resulting in an operational deficit of ₦10.23billion.

InlandTown! 2020

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