The nation’s three refineries located in Port Harcourt, Kaduna and Warri have recorded a combined loss of N50 billion in five months (January to May) 2020.
The disclosure 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) on Wednesday.
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.
‘‘That is the loss figure recorded by the refineries on a monthly basis. Even in this current month of May, that is the loss figure that will be posted.”
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 their 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.
“I get worried when people go against the sale of the refineries. I get worried because those who maintain such positions are ignorant and not in tune with current realities or the state of the refineries. What is in a national asset that does not return value on investment?”
He said the 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 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 N37.24 billion respectively during the same period.
It was further observed that the actual revenue made by the three facilities during the period was N68.82 billion while their expenses were put at N192.1 billion.
Of the three refineries, WRPC made the highest revenue of N59.1 billion during the period, even as it posted the highest loss of N96.32 billion.
KRPC and PHRC made N6.23 billion and N3.46 billion as revenues in the 10-month period but lost N55.59 billion and N40.16 billion respectively.
For October 2019 alone, the facilities posted a cumulative loss of N11.72 billion.
Their individual losses in October were N5.24 billion, N3.38billion and N3.1 billion 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.