The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mr Mele Kyari on Wednesday disclosed why all the nations four refineries (Kaduna, Warri, Port Harcourt and Eleme Petrochemical), located in three locations have been completely shutdown deliberately.
Speaking on Channel Television’s Politics today, Kyari said that the inevitable shutdown was necessitated by difficulties in feeding them with crude oil via the pipelines that have been completely compromised by vandals.
“That means you’re not able to deliver crude oil to them to operate to the maximum of their capacity.
“Secondly, what you call rehabilitation is different from turnaround maintenance (TAM). TAM is a routine endeavour. When you talk about rehabilitation, that means you have colossal loss of capacity in the refineries. It means you’ve not done TAM properly, you’ve not replaced parts and when due and it has gotten to a point where you’re not able to operate the refineries in the full installed capacities.
“With all the TAM down, it was impossible to run any of these refineries at 90% capacity. Our estimate was that we could run at 60% capacity but if we do that, it’s simply value destruction. You take a $100 crude and bring out $70 product, it doesn’t make sense.
“We want to make them work and that’s why we’re doing full rehabilitation. Refineries are like aircraft. I’ve visited refineries that are over 100 years old that are still still functioning. Refineries don’t die like cars or other assets.
“You saw our 2018 financial statement which indicated that we’ve lost money in the refineries.
So, our target is that when they come back to life, they’ll run over 90% capacity. We’re also working with the private sector to establish condensate refineries”, he said.
The NNPC GMD also revealed that plans are afoot to ensure that oil marketers will have access to
forex at a uniformed price so that product prices will be largely uniform across the country.
CBN determines that naira to dollar price. Naira price is largely predictable. There’s no challenge unless the difference is at exponential level. I don’t see any escalation of naira to dollar. It won’t have huge collateral damage to the dollar to the point that product prices will be too high. The common man has been protected”, he said.
