Nigeria’s refineries have recorded a combined loss of N50 billion in the first quarter of this year.
The proclamation was made by Mr. Joseph Nwakuwe, during a webinar seminar titled ‘Repositioning the newsroom to respond to changes in the oil sector in a COVID-19 era’ organized by Accountability Workstream Facility for Oil Sector Transformation (FOSTER 11) yesterday.
Nwakuwe, who is the Chairman of Society for Petroleum Engineers(SPE), said the refineries post an average of N10 billion on a monthly basis, saying the country cannot afford to record losses in that huge number.
The oil expert warned that should the country fail to sell the refineries now, they may not get value for it anymore.
He said the refineries have outlived its usefulness and should be sold as soon as possible to those who can add value to it, adding that the amount of money spent on the endless rehabilitation of the refineries was no longer sustainable.
He added that country must come up with a fiscal policy that drives development in the midstream and downstream sectors so that they are more energized.
Nwakuwe lamented that the country was not getting value for its crude oil because a larger chunk of the resources was exported in its crude form and later returned as imported petroleum products.
This, he said, was not good for the industry and the economy as a whole.
From January to October 2019, refineries under the management of the Nigerian National Petroleum Corporation(NNPC) made a cumulative loss of N123.25billion.
An analysis of data in the October 2019 oil and gas report of the NNPC showed that all three entities recorded losses during the period under review.
Findings showed that while Kaduna Refining & Petrochemical Company (KRPC) posted a loss of N49.3billion in the 10-month period, Port Harcourt Refining & Petrochemical Company (PHRC) and Warri Refining & Petrochemical Company (WRPC) lost N36.7billion and N37.24billion respectively during the same period.
It was further observed that the actual revenue made by the three facilities during the period was N68.82billion while their expenses were put at N192.1billion.
Of the three refineries, WRPC made the highest revenue of N59.1billion during the period, even as it posted the highest loss of N96.32billion.
KRPC and PHRC made N6.23billion and N3.46billion as revenues in the 10-month period but lost N55.59billion and N40.16billion respectively.
For October 2019 alone, the facilities posted a cumulative loss of N11.72billion.
Their individual losses in October were N5.24billion, N3.38billion and N3.1billion for KRPC, PHRC and WRPC respectively.
On subsidies, the oil and gas expert said, the time to suspend further funding of fuel subsidy was now as the monies expended on same since 2006 was capable of building about five refineries.