Data from the Nigerian National Petroleum Commission, NNPC, suggest that Nigeria is losing billions of naira on a monthly basis, due to the inability of the country’s refineries to function optimally.
According to the NNPC, its revenue had decreased from N520.4 billion in April 2018 to N292.3 in November 2018, leading to the loss of N228.1 billion within the period under consideration.
The development, therefore, marked a reversal of growth pattern recorded earlier in 2018 when the NNPC’s revenue N323.19bn recorded in January to N520.4bn in April.
It’s safe to say that the NNPC figures are not surprising. Nigeria has about four refineries, none of which can be said to perform in full capacity.
For instance, the Kaduna Refinery and Petrochemical Company did not refine a drop of crude oil in early 2018 and indeed throughout much of 2018.
In the same vein, neither of the Warri Refining and Petrochemical Company and the Port Harcourt Refining Company were stable in their production capacities during the period.
Declining NNPC revenue is bad for Nigeria’s economy
The decline in NNPC’s revenue, as occasioned by the poor performance of Nigeria’s refineries, is a bad development for Nigeria. This is because the Nigerian economy is mainly funded with funds disbursed by the NNPC.
Another negative implication of the inability of local refineries to perform is that the country will continually depend on the importation of petroleum products to meet demand. This is a disgraceful thing for Nigeria, which produces a considerable volume of the global crude output.
More so, the importation of refined petroleum products is a costly alternative, seeing as the Government has been projected N39.9 billion monthly in fuel subsidy fees, according to an earlier analysis by Nairametrics.
There is hope, however, that someday soon Nigeria’s fuel importation crisis will come to an end. This is because Africa’s richest man, Aliko Dangote, is putting finishing touches to what will arguably become one of the biggest refineries in Africa and the world.