Nigeria’s Idle Refineries Record N6bn Operational Expenses

Without production, Nigeria’s three national refineries recorded N6 billion operational expenses last October.

The total value of output by the refineries for the period under review was N0.51billion, which resulted in an operating deficit of N5.49 billion by the refineries.

NNPC made this known this in its October 2020 Financial and Operations Report.

Commenting on Refineries Economics for the Period October 2020, the report said the corporation has been adopting a merchant plant refineries business model since January 2017.

According to the report, the model takes cognizance of the products worth and crude costs. The combined value of output by the three refineries at import parity price for October 2020 amounted to approximately N0.51billion.

“No associated crude plus freight cost for the three refineries since there was no production, but operational expenses amounted to N6 billion. This resulted to an operating deficit of N5.49 billion by the refineries,” the report stated.

NNPC also noted that petroleum Product Supply from Direct sales Direct Purchase (DSDP) last October, 2,391.15 million litres of PMS were supplied through the DSDP as against the 1,578 93million litres of PMS supplied last September.

It added that a total of 1,224.54 million litres of white products were sold and distributed by Pipeline Products Marketing Company (PPMC) in October 2020 compared to 603.39 million litres in September 2020.

According to the report, this comprised 1224.20 million litres of PMS,0.31million litres of AGO and 0.033 million litres of DPK.

“There was no sale of special product in the month,” NNPC stated.

Meanwhile, the report noted that total sale of white products for the period October 2019 to October 2020 stood at 16,462.50 million litres and PMS accounted for 16,344.36million litres or 99.28 per cent.

The corporation said a total sum of N158.04 billion was made on the sale of white products by PPMC in the month of October 2020 compared to N80.15 billion sales in September 2020.

Total revenues generated from the sales of white products for the period October 2019 to

October 2020, according to NNPC, stood at N1.95 trillion where PMS contributed about 99.07 per cent of the total sales with a value of N1.93 trillion.