Information from the Nigerian National Petroleum Corporation, NNPC, has revealed that a whopping sum of $367 million was spent on local refineries which did not process any crude oil in the 13 months to end June.
In the same period, operating costs for the country’s three main oil refineries, which the NNPC has shuttered pending revamps, totalled $367 million.
“No white product (Premium Motor Spirit and Dual Purpose Kerosene) was produced in June 2020 and apparently for the past 12 consecutive months.
The lack of production was due to ongoing rehabilitation works at the refineries,” the report said.
The NNPC said in April that it had closed all its oil refineries as it works to secure funding and a model to upgrade them, adding that when the Kaduna, Port Harcourt and Warri refineries are revived they would no longer be managed by the company.
For years the facilities have only worked sporadically due to underinvestment and the country faces an uphill battle to sell its oil abroad due to hollowed out demand from the coronavirus pandemic and abundant oil in global markets.
The NNPC report said that all but a tiny fraction of the country’s domestic fuel had come via an agreement between Nigeria and a large handful of companies to swap the nation’s crude oil for fuels, dubbed direct sale, direct-purchase (DSDP).
Just under 40,000 megatons of crude was the only oil processed by the country in the reporting period, the report added, only 2 per cent of the country’s refining capacity. “The declining operational performance is attributable to ongoing revamping of the refineries which is expected to further enhance capacity utilisation once completed,” the NNPC said.