Why We Shutdown Refineries Across The Country – NNPC

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NNPC Restates Commitment To Cutting Costs

The Nigerian National Petroleum Corporation (NNPC) has explained that it shut down the four oil refineries in Port Harcourt, Warri, and Kaduna because they were functioning below capacity.

The Group Managing Director of the NNPC, Mele Kyari, made this known on Wednesday in a television interview monitored by Ijaw News.

Kyari maintained that having ascertained that the refineries were underperforming, it became necessary to stop them from operating further.

In his words: “All the four refineries in three locations are shut down and it was a deliberate decision for two reasons. One is that the delivery of crude oil to these refineries is completely challenged because the pipeline network has been completely compromised by vandals and all kinds of people that will not allow us to operate these pipelines.

READ ALSO: NNPC Pipeline Operations Halted Over Petrol Leaks

“That means you are not able to deliver crude oil to these refineries effectively to their maximum capacity. Secondly, what you call rehabilitation is different from the turn around maintenance. Turnaround is routine which every refinery does but when you talk about rehabilitation, it is that colossal loss of capacity in the refinery and it means you haven’t done the turnaround maintenance properly.

“Typically, every refinery is expected to operate at 90 per cent of its installed capacity. With the best of effort, with all the turnaround maintenance that has taken place, it is impossible to run any of the refineries before the shutdown at that level. Our estimate was to run it at 60 per cent of capacity but if you do that, all you are doing is value destruction. You will take $100 crude into the refinery and bring out $70 product. It doesn’t make sense.”

On the recent hike in the price of petrol, the NNPC GMD condemned the criticism that followed the increase.

He said: “The outburst is very understandable but I also believe very strongly that it is misplaced because Nigerians are not aware of the opportunities lost,”

The issue of subsidy, according to Kyari, has been a big issue in the country for many years adding that the government can no longer afford it because of the economic issues facing the country.

“And not only that, every corruption that you are aware of in the downstream industry is one way or the other connected to fuel subsidy,” the NNPC boss added.

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