Consolidated capacity utilisation of Nigeria’s three refineries dropped to 6.1% at the end of September 2017, a sustained decline from the average figure of 13.7% in 2016.
An analysis of NNPC’s financial report at the end of September 2017 by TheCable Petrobarometer showed that this is a sharp drop from 9.5% in August.
The report showed that only Warri refinery operated in August and therefore accounted fully for the processing capacity during the month.
The refinery, however, recorded no processing in the month of September due to ongoing repair works.
Apart from January and August when the refinery recorded reasonable processing operations, it was mostly inactive in 2017.
Prior to 2017, the refinery recorded no crude processing in the last two months of 2016.
Port Harcourt refinery came alive in September after a break in August and processed 40% of the 286,151 metric tonnes of crude allocated to it.
It is the only refinery that has shown a reasonable state of stability in operations.
Except for the month of August 2017, it has maintained a non-stop operation since October 2016 with an appreciable level of capacity utilisation.
The level of operation in September is however one of the lowest so far in the year.
Kaduna refinery has not processed any crudes since June 2017 after operating consistently for the first five months of the year. NNPC’s report shows that crudes have been available consistently to all the refineries, which they are largely unable to process.
For Kaduna refinery, total crudes made available for processing in August and September were the same as closing stocks for the periods, showing zero capacity utilisation.
Budget numbers for 2017 appear to have failed to reflect the highly volatile state of operations of the refineries.
Despite that Warri refinery was down in the last two months of 2016, NNPC’s budget planners expected it to generate total revenue of N236.21 billion at the end of September 2017.
It generated a disappointing N69.49 billion or 29% of the budgeted figure at the end of the period.
That was insufficient to meet its total expenditure of N81.52 billion over the same period.
Kaduna refinery exceeded its revenue target of N80.31 billion for the first nine months of the year and reported total revenue of N95.07 billion at the end of September.
On the other hand, it overshot expenditure budget by N20.36 billion to N115.43 billion over the period.
Port Harcourt refinery remains the best performer with total revenue of N284.14 billion at the end of September or over 83% of budget target.
Its expenditure was also below budget mark, which permitted an actual surplus of N29.55 billion for the company at the end of September.
Inability of the refineries to improve on processing capacity after repairs that last for months remains a major issue of concern.
Besides, the volume of refined products achieved from crudes supplied indicates a wide margin of inefficiency and consequent loss of products and value to the nation.