The announcement that Nigeria local refineries have commenced operation is a welcome development but what the refineries will offer if allowed to work at full capacity should be an issue for consideration.
Several times in the past, the four local refineries have undergone turn around maintenance which has gulped money from the country. But the current announcement by the Nigeria National Petroleum Corporation (NNPC) that the refineries are working again came at the right time.
We need to know that if the four refineries are allowed to work at full capacity of 445,000 barrels per day, it translates to 53 million litres per day. This is more than the 50 million litres of petroleum products required for local consumption per day.
Although the understanding of many Nigerian’s is that the refineries have not been working, but NNPC Monthly Petroleum Information data showed that the four refineries have been receiving crude for processing and are working only at a level below their full capacity.
As at December 2014, the performance of Nigeria’s four refineries did not deviate from the lackluster past. The National Petroleum Corporation’s monthly petroleum information made available to the public shows that the three refineries operated at 11 percent of their full capacity during the month. All other parameters used to judge the performance of the four refineries revealed the dilapidated state of these four refineries.
During the month under review, the four refineries received 3,976,505 barrels of (537,435 metric ton) crude oil from the NNPC to be processed into different petroleum products. This is equivalent to 10,897 barrels per day, 2.4 percent of the four refineries full capacity of 445,000 barrels per day.
The breakdown of the crude oil received shows that Warri Refining and Petrochemical Company (WRPC) received more than 39 percent of the total crude sent to the three refineries, which is equivalent of 4,289 barrels per day and 3.4 percent of its full capacity.
The Kaduna Refining and Petrochemicals Company (KRPC) received 924,271 barrels which translates to 2,532 barrels per day and 2.3 percent of its full capacity utilization. Port Harcourt Refining Company Limited (PHRC) received 1,486,875 barrels, translating to 4,074 barrels per day.
Interestingly, not all the 3,976,505 barrels was eventually processed into petroleum products. Only 35 percent of the crude oil received was processed into different petroleum products while the remaining 65 percent can be regarded as operational loss or otherwise.
This implies that the four nation’s refineries only processed 1,395,610 million barrels to produce different petroleum products. Out of the crude oil processed, WRPC did not process the crude received because it was not in operation during the period under review. KRPC and PHRC only processed 15 and 84 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 rely on imported petroleum products to service the economy.
The four refineries processed 1,395,610 barrels of crude oil in the month of December 2014and this resulted in 194,669,160 liters of the different petroleum products during the month under review.
Presently, NNPC computations show that Nigeria needs more than 50 million liters of petroleum products per day. These include 30 million liters of Premium Motor Spirit (PMS), 8 million liters Dual Purpose Kerosene, 10 million liters of Automotive Gas Oil (AGO) and other products like Liquefied Petroleum Gas and fuel oil.
Looking at the 194,669,160 liters produced by the four refineries in the month of December 2014, it translates to 6,488,972 litres per day, representing 12 percent of daily litres of products needed by Nigerians. This implies that output from the four refineries for the month of December 2014 is not enough to meet the daily demand for PMS alone for the month.
The products breakdown shows that the four refineries produced 18 million liters of PMS for the month. This is just 60 percent of the daily demand for PMS.
For DPK, the refineries output for the month is just 15 percent of the country demand for DPK per day while output for AGO is 28 percent of the country demand for the product based on the same 2001 computation done by NNPC.
However, the second Port Harcourt Refinery which NNPC says will come on stream in July 2015 is 150,000 barrels per day capacity was constructed in 1989. At optimum level it can process over 11 million litres of PMS, over 2.3 million litres of household kerosene (HHK), over 5.4million litres of automotive gas oil (AGO) and other by-products per stream day.