• Monday, March 04, 2024
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BusinessDay

Matching demand with Nigeria’s refinery output

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In 2013, the performance of Nigeria’s four refineries did not deviate from the lacklustre past. The National Petroleum Corporation’s quarterly report made available to the public shows that the three refineries operated at 19 percent of their capacity in first three quarter.

A lot had been spent on the rehabilitation of these refineries over the years. According to the Minister of Petroleum Resources, “the Turnaround Maintenance (TAM) of the Port Harcourt refineries had been completed while maintenance was due to commence immediately on the other refineries to restore commercial value.” However the impact is yet to be seen.

Rather all parameters used to judge the performance of the four refineries revealed the dilapidated state of these refineries.

In the first three quarters of 2013, the four refineries received 36.68 million barrels of (5,252,514 metric ton) crude oil from the NNPC to be processing into different petroleum products. This is equivalent to 100,482 barrels per day, 23 percent of the four refineries fully capacity of 445,000 barrels per day.

A breakdown of the 36.68 million barrels shows that Warri Refining and Petrochemical Company (WRPC) received more than 50 percent of the total crude sent to the four refineries, which equivalent to 55,062 barrels per day. The crude received is 44 percent of its full capacity.

The Kaduna Refining and Petrochemicals Company (KRPC) received 10.75 million barrels which translates to 29,458 barrels per day and 27 percent of its full capacity utilization.  Port Harcourt Refining Company Limited (PHRC) received the least portion of 5.83 million barrels, translated to 15,962 barrels per day.

Interestingly, not all the 36.68 million barrels was eventually processed into petroleum products. Only 72 percent of the crude oil received was processed into different petroleum products while the remaining 28 percent can be regarded as refineries lost or operational lost.

This implies that the four nation’s refineries only processed 26.37 million barrels to produce different petroleum products. Out of the crude oil processed, WRPC processed 12.8 million barrels into different petroleum products; this represents 64 percent of crude received. KRPC and PHRC processed 82 and 81 percent of the crude received respectively into different petroleum products.

It is unfortunate that the output from the four refineries could not meet the demand for petroleum products after several years of refining. This makes Nigeria, an oil producing nation to relie on imported petroleum products to service the economy.

The four refineries processed 26.37 million barrels of crude oil in the first three quarter of 2013 to 4.39 billion litres of the different petroleum products. This translated to 12.02 million litres per day small compared to NNPC computation of local demand for petroleum products for 2001.

Presently, NNPC computations show that Nigeria needs more than 50 million litres of petroleum products per day. These include 30 million litres of Petrol Motor Spirit (PMS), 8 million litres Dual Purpose Kerosene, 10 million litres of Automotive Gas Oil (AGO) and other products like Liquefied Petroleum Gas and fuel oil.

The 12.02 million litres daily output from the four refineries is not even enough to meet the demand for PMS which is 30 million litres per day. For PMS, the four refineries produced 2.71 million litres per day as at 2013; this translates to 9 percent of the country demand.

For DPK, the refineries output is just 24 percent of the country demand computation of 2001 while refineries output for AGO is 28 percent of the country demand for the product based on the same 2001 computation done by NNPC.

Demand for products has continued to grow due to better standards of living, more Nigerians now have cars, and there is greater need for constant power supply. Products with greater demand include Petrol Motor Spirit (PMS) 839,973 metric ton, Dual Petrol Kerosene (DPK) 598,118 metric ton, Automotive Gas Oil (AGO) 852,330 metric ton, fuel oil 934,919 metric ton and others 1,440,320 metric ton.

On projections for the refineries, the corporation said it intended to “transform the refineries into stand alone profitable business units; continue integrity type maintenance project; build capabilities and improve on refinery operation and continue to utilise alternative crude supply routes to the refineries as a secondary supply strategy.”

By:  Olowa Peter