Refineries Earn N3.45bn, NAPIMS Makes N1.02trn – NNPC
The nation’s refineries generated a total revenue of N3.45bn in 2018 but their salary expenses and other expenses gulped N160.13bn, the Nigerian National Petroleum Corporation has said.
It also disclosed that its investment arm made a profit of N1.02tn within the year.
The NNPC said these in its audited financial statements made public on Monday.
The public disclosure of the accounts is a departure from the recent past as the performance of the corporation had remained opaque.
Payment of salaries, wages and allowances to workers at the ailing refineries accounted for more than a third (33.49 per cent) of the total expenses.
The refineries, which are located in Port Harcourt, Kaduna and Warri, have a combined installed capacity of 445,000 barrels per day but have continued to operate far below the installed capacity.
The refining companies, which are subsidiaries of the NNPC, earn revenue in form of processing fees charged on crude oil processing for the corporation.
The Kaduna Refinery and Petrochemical Company Limited did not generate any revenue in the year under review but it incurred a total cost of N64.68bn, comprising N24.69bn direct cost and N39.99bn administrative expenses.
The company said it did not earn any income through processing fee due to “the shutdown of the plants and the ongoing turnaround maintenance.”
Salaries, wages and other fringe benefits gulped N13.85bn, according to its financial statements.
Port Harcourt Refining Company Limited, which earned N1.46bn in 2018, said its processing and administrative expenses were N24.04bn and N24.03bn respectively, amounting to N48.07bn.
The company spent N9.23bn on salaries and allowances plus bonus, in addition to N9.56bn paid to workers directly involved in the processing of crude (direct labour).
The Warri Refining and Petrochemical Company Limited generated N1.99bn in revenue but said its cost of sales and operating expenses were N12.74bn and N34.64bn respectively, amounting to N47.38bn.
A total of N20.99bn was paid to its workers as salaries, wages and allowances in 2018, according to its financial statements.
“The WRPC is funded by the NNPC in order to meet the working capital requirements of the refinery,” the company said.
Nigeria, Africa’s top oil producer, relies largely on importation for refined petroleum products as its refineries have remained in a state of disrepair for many years despite several reported repairs.
Last week, the Group Managing Director, NNPC, Mallam Mele Kyari, said the failure to fix the country’s refineries over the years was a strategy problem.
He said it was very difficult to explain why an oil-producing country would become a net importer of petroleum products.
The NNPC boss said the country had changed its strategy to allow a new framework.
“This framework would enable others to help us. Ultimately, we will change that equation and that is very simple. We will set a target for ourselves and have a clear strategy for achieving it,” he added.
In the first term of the President, Major General Muhammadu Buhari (retd), the NNPC had planned to rehabilitate the refineries to attain a minimum of 90 per cent capacity utilisation.
The plan was to use third-party financiers and the original refinery builders to provide the requisite funding and technical support.
However, after over one and a half years, negotiations with financiers were stalled in December 2018 due to varying positions on key commercial terms.
Kyari, who took over the NNPC leadership in July 2019, had reiterated his plan to revamp the refineries and end fuel importation by 2023.
The KRPC reported a loss of N64.34bn in 2018; the WRPC lost N44.44bn; and the PHRC posted N45.59bn loss.
The subsidiaries that made profits in the year under review included the National Petroleum Investment Management Services (N1.02tn); the Nigerian Petroleum Development Company Limited (179.14bn); the Petroleum Products Marketing Company Limited (N9.35bn); the Nigerian Gas Company Limited (N13.29bn); and NNPC Retail Limited (N2.28bn).
