• April 13, 2021

The Need For A Paradigm Shift In The Management Of Nigeria’s Oil Refineries


(AGENDAWATCHDOG) – Despite being one of the world’s leading oil producing and exporting nations, Nigeria has gradually transformed into a net importer of processed petroleum products, spending billions yearly in importation, despite having four refineries.

Nigeria’s four refineries located in Warri, Kaduna and Port Harcourt (with 2 refineries), initially refined all the country’s crude, alongside the 445, 000 barrels allocated for domestic consumption.

However, consequent to decades of negligence, uncensored corruption and botched Turn Around Maintenance, TAM, the refineries’ production capacities have drastically reduced, resulting in the country resorting to the importation of refined crude to meet its domestic demands.

No Nigerian refinery worked up to 50% capacity in 2017 – NNPC

Despite the existence of two Port Harcourt refineries with a combined production capacity of 210, 000 bpd, the Kaduna refinery with a production capacity of 110, 000 bpd, and the Warri refinery with a production capacity of 125, 000 bpd, recent data from the Nigerian National Petroleum Corporation, NNPC, have shown that no crude has been refined in these facilities in the past 2 years.

Consequently, huge loses and debts have been incurred by the country’s refineries, as shown by recent data, which indicates that they rank on top of unprofitable sections in the NNPC group, with a total combined loss of N118.048 billion between October 2019 and September 2020, with Kaduna accounting for N44.124 billion, Warri N35. 083 billion, and Port Harcourt N 38.841 billion.

Again, approximately N396.33 billion and N270. 87 billion were reportedly expended on the TAM of the refineries between 2013 and 2014, and 2015 and 2018 respectively, with nothing to show for it.

Agenda Watchdog’s verdict is that the continued wastage of scarce funds in the maintenance of these comatose refineries should stop forthwith since the country still lacks the capacity to process crude, despite having four refineries.

The way out of this conundrum of inefficiency, sleaze and wastage that has become the sad lot of the country’s refineries is privatization, despite the botched attempt to privatize the Port Harcourt and Warri refineries during the waning days of the Olusegun Obasanjo years. Another shot, a more serious one at that, should be given at the idea of bringing in private hands to take over the running of the country’s comatose refineries.  This seems to be the best way going forward; especially as private refineries are about making their debut.

It is in this light that the general angst that accompanied the purported approval by the federal government of a mouthwatering sum of $1.6 billion (approximately N600 billion) for the rehabilitation of the PH refinery can be viewed as a collective rejection of the continued wastage of scarce pubic funds in the maintenance of these parasitic dinosaurs.

 The concerned authorities should please take note!


Agenda Watchdog

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