Nigeria’s refineries are becoming an increasingly expensive pastime. Between January 2015 and February 2021, the NNPC has posted a combined loss of ₦473.3 billion while operating the three refineries: Warri, Port-Harcourt and Kaduna. In that time, only 6.73% of their capacity has been utilised on average. In fact, none of the three refineries has produced a drop of refined petrol since July 2019, racking up over ₦185 billion in losses.
And yet, there’s no sign of the expenditure slowing down. In March, the Federal Executive Council approved the sum of $1.5 billion (₦606 billion) for the rehabilitation of the Port-Harcourt refinery. The repair, which will be executed by Tecnimont SPA, an Italian company, will be done in three phases of 18, 24 and 44 months. Last week, a further $1.48 billion was approved for the Kaduna and Warri refineries, this time to Saipem SPA, another Italian company.
Nigeria must count the cost, not only of spending scarce resources on refineries that have not reached more than 30% capacity in over six years but also of the income foregone from not privatising them, like has been long suggested.