Nigeria National Petroleum Corporation has said that it cost N136 to refine one litre of petrol in Nigeria. Speaking at the ongoing oil and gas conference in Abuja, Mr. Anibor Kragha, Chief Operating Officer, Refineries of the NNPC, stated that presently, only the Port Harcourt and Kaduna refineries are working, though far below their installed capacity.
Kragha said that the depot price of petrol produced from the country’s refineries currently stood at N133 per litre, while the ex-depot price is N136 per litre, meaning that at N145, oil marketers are gaining N9 from a litre of PMS from the country’s refineries. He stated that despite the not-too-good shape of the refineries, the NNPC has no mandate to sell any equity in any of the refineries, stating that it had set a 24-month target to revamp the refineries and also boost Nigeria’s refining capacity through the co-location arrangement among others.
He said that the two refineries are producing about five million litres of Automotive Gasoline Oil, AGO, as well as Premium Motor Spirit, PMS, and Household Kerosene, HHK. He stated that as at January 2017, all the four refineries were working, until a few days ago, when the Warri refinery was shut down due to some technical faults.
“The only refinery that is having some issues is the one in Warri, because we have a bit of a power challenge and we are working very hard with General Electric, GE, to address that. But in January all of them were working. The whole Port Harcourt refinery has come on stream and they are running well.
“Meanwhile the Warri refinery had also started running but there is something with the gas turbine generators that tripped, so it was shut down to make sure we address that, but as you know you cannot start up the equipment without having negative things happen.”
“We have gas turbine generations in Warri and they shift. We have GE on site to correct it. It is not an efficiency thing. All the units were running — Crude Distillation Unit, CDU, Fluid Catalytic Converter, FCC, and they were running in Warri and then we have this trip and said we are going to shut down to address it properly.”
A one time Managing Director of the Port Harcourt and Kaduna Refineries, Mr. Alex Ogedegbe, warned against incorporating illegal crude oil refiners, stating that it poses serious hazards and risks to the environment, lives of individuals and vehicles.
He said, “It should not be encouraged. We are talking about stolen crude. The risk on their lives is very disastrous. Illegal refineries are illegal. They are very dangerous things to have around. The products they produce are not on specifications.
He, however, commended the Federal Government’s efforts at revamping the country’s refineries, stating that the refineries should be run like private businesses with profit-making motives.
Ogedegbe said, “The Federal Government is already doing the right thing to rehabilitate the existing refineries by calling those companies that build them. The government may not have the money to finance it. When they rehabilitate the refineries, they would be producing. Like the Port Harcourt refinery can produce a 150,000 barrels of crude per day. But today it is not producing 15,000.
“Rehabilitate the existing ones and form partnership with the private sector so they can be run like businesses. It means we have to make profit and when that is achieved we then reinvest into the business. Today the federal government is not making profit from any of the refineries, but losses.
“And so if they go with the private investors who knows about refining, the investors will make profit. Today, Eleme petrochemical makes N25 billion to N30 billion profit every year. The government takes maybe 25 per cent of that money on Eleme. Let them do the same to the refineries, make profit and give the government dividend.”
Commenting on plans to build smaller and modular refineries in the country, he said, “There is no new refinery today in the world that is less than 500,000 barrels per day. The cost of putting 500,000 is the same cost as putting 100,000 barrels. While do you think Dangote is building 650,000 and not 100,000. The cost is almost the same for 100,000 barrels.”
