REVEALED: Nigerian refineries produced at 1.4% capacity in September

Nigerian refineries produced at less than two percent capacity for the month of September, according to the latest report of the Nigerian National Petroleum Corporation (NNPC).

The report revealed that refineries, which were speculated to have been operating at over 60 percent capacity, did not produce such at any time in 2015.

For the month of August, Warri, Port Harcourt and Kaduna refineries produced at 26.6%, 29.7% and 10.5% respectively, producing at an average of 22.3%.

The Warri refinery recorded the highest level of production in the past 10 months, producing at 32.7% in January 2015, according to the report.

These values fell drastically in September, as the Kaduna and Warri refineries had no production at all, as Port Harcourt produced at 4.2%, yielding an average of 1.4%.

With respect to this production levels, the refineries ran at a loss of N8.84 billion for the month.

“The combined value of output by the three refineries (at import parity price) for the month of September 2015 amounted to N9.91 billion, while the associated crude plus freight cost was N6.35 billion, giving a loss of N8.84 billion after considering overhead of N12.40 billion,” the NNPC said.

Ibe Kachikwu, group managing director of the corporation, has been clamouring for the sale of the refineries and removal of subsidy.

He believes that the measures make the country run at a loss.

He said upon the president’s insistence, the NNPC would see how best to run the refineries within 90 days besides, and sell them, if optimum targets are not met.

“If we can’t run them, then we need to get out, make adequate arrangement, privatise them and take them out,” he said at his ministerial screening.

“Whenever you don’t run a refinery well, every barrel of crude that is sent into that refinery produces less. Today, if you send a $52 crude, you produce an income of about $15 to $20. So from point one, you’re already losing money.”

The government-run corporation, which ran at N51.71bn and N60.67bn loss for July and August respectively, lost N59.4b in September.