The recession rocking Nigeria's economy and the increase in the price of petrol have gotten deep into the downstream oil and gas business, crashing petrol consumption by Nigerians to 24.24 million litres daily average in the last seven quarters.
A data prepared by BudgIT obtained by New Telegraph at the weekend revealed that the sales of Automative Gas Oil (AGO) also known as diesel across the country dipped to an average of 3.12 million litres daily.
This major threat to the success of multi-million dollars filling stations’ investments in the country, checks by New Telegraph showed, was part of consideration by major integrated oil firms like Exxonmobil and Total for their downstream assets sale spree.
Revealing that daily average sales of petrol fluctuates between 15.23 million litres in September 2015 and 35.09 million litres in May 2016, the report, prepared in collaboration with the Nigerian Extractive industry Transparency Initiative (NEITI), showed that the daily average sales for diesel and kerosene came to 1.06 million litres and 3.12 million litres respectively.
The average capacity utilisation of the four refineries in Port Harcourt, Warri and Kaduna in the 21 months period, according to BudgIT, was about 8.55 per cent.
“In seven out of the 21 months under review, the refineries did not process any volume of crude oil, with consolidated capacity utilisation of the refineries put at above 20 per cent only in August 2015 (24.08per cent).
“Out of the 245.48 million barrels received by the Nigerian National Petroleum Corporation (NNPC) for domestic supply in 21 months, only 24.78 million barrels were delivered to the refineries for processing, amounting to only 10.06 per cent of total allocation for domestic consumption,” the report read.
Comparatively, the report described Kaduna refinery as “the poorest performer,” and Port Harcourt refinery the best.”
Buoyed by the gross inefficiency of the refineries, the NNPC had also declared its readiness to issue fresh multi-million dollars contracts for comprehensive rehabilitation of refineries in 2017, jettisoning the N264 billion earlier spent on maintenance of the facilities since 1999.
Chief Operating Officer (COO), Refineries of the NNPC, Mr. Anibor Kragha, who gave this hint at the annual general meetings of the three refineries in Abuja on Tuesday, stated that the corporation was determined to move away from the approach of quick fixes and undertake a comprehensive revamp of the plants.
The nation’s three refineries located in Port Harcourt, Warri and Kaduna, documents of the NNPC showed, have gulped up to $1.746 billion or N264 billion using a 16-year average USD/naira exchange rate of N150.99/$1 compiled from a Bloomberg data.
‘’The plan for next year is to get the comprehensive rehabilitation programme done. The situation is like having three cars in your garage that have not been maintained for 15 to 20 years while you expect optimal performance from them,” Kragha said, suggesting that the installations were worked on despite $1.746 billion contracts issued on them in 16 years.
Kragha, according to a statement by NNPC, added: “Changing one fuel pump here, one compressor there is not helpful.
What we are doing now is to step back and take a holistic approach and do a full rehabilitation of all the refineries.”
He noted that once the exercise was achieved, the refineries in due course would draw up a chart for routine Turn Around Maintenance (TAM) programme as and when due.
On the earlier plan to have other refineries co-located with the existing refineries, Kragha explained that though the plan was still on course, none of the projected co-location refineries would come on stream in 2017 based on existing timeline for assemblage of the plants.
On the plan by Port Harcourt Refinery to commence the production of Aviation Turbine Fuel (ATK) for domestic consumption, the COO enthused that the refinery was a few steps away from hitting the mark.
“We are very close; we have done tests with some of the key marketers. We have achieved all the parameters, we just want to be 110 percent certain,” he said.
Earlier in his remark, the Managing Director of the Kaduna Refining and Petrochemicals Company, Mallam Idi Mukhtar Maiha, said KRPC was assiduously working towards a target of 75 per cent capacity utilisation in the New Year based on projected supply of one cargo of crude oil per month.
The Managing Director of Warri Refining and Petrochemicals Company, Engr. Solomon Ladenegan, in his presentation during the company’s AGM, noted that despite the hostile operating environment fraught with incessant cases of pipeline pulverisation and outright product theft, the refinery was looking forward to better days ahead.
It would be recalled that the government had spent N264 billion on maintenance of its four refineries since 1999 when the country returned to democracy.
The four refineries located in Port Harcourt (two), Warri and Kaduna have a combined capacity to refine 445,000 barrels of crude per day.
The installations have suffered worsening the deficit in supply of petroleum products and raising dependence on importation.
The $1.746bnTAM investments were different from the sum of $308 million reportedly spent for the same purpose by the military governments of late General Sani Abacha ($216 million) and General Abdusalami Abubakar (rtd) $92 million.
Read more in NewTelegraph
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