Idle refineries may worsen aviation fuel scarcity

 

Problems of inadequate supply and high cost of aviation fuel may linger as the nation’s four refineries, which are supposed to be producing the commodity, have remained dormant.

The Minister of State for Aviation, Senator Hadi Sirika, had stated on several occasions that the refineries would commence the refining of aviation fuel, popularly known as Jet-A1, in order to address the concerns of operators on the availability of the commodity.

On Wednesday, Sirika was quoted to have said that he had met with the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, and that efforts were on to ensure that refineries began to refine the product locally.

But the latest monthly financial and operations report of the Nigerian National Petroleum Corporation showed that the refining of Jet-A1 locally might not happen any time soon as two of the refineries were unable to process any volume of crude oil in July 2016 despite receiving substantial crude volumes during the month.

Although airline operators expressed optimism based on Sirika’s promise, they, however, noted that the idleness of the refineries was not encouraging and might derail the target of refining Jet-A1 in the country.

They told our correspondent on Thursday that the cost of aviation fuel at over N200 per litre, amidst its scarcity and epileptic supply, had increased the operational costs of airlines astronomically and had led to the abrupt halt in the services of some indigenous carriers.

The Chairman, Airline Operators of Nigeria, Capt. Nogie Meggison, explained that this had led to about 50 per cent of flight delays and cancellations on the domestic routes across the country and was highly counter-productive to the airline business.

He, however, expressed optimism that the refineries would become considerably functional before the end of the year as envisaged by many players in the sector.

The nation’s refineries are the Warri Refining and Petrochemical Company, Port Harcourt Refining Company (two plants) and Kaduna Refining and Petrochemical Company.

Of these, only the PHRC was able to process 126,765 metric tonnes of crude oil out of a total of 300,038MT that was made available to it in the month under review.

The other two, WRPC and KRPC, did not process any crude despite having 238,849MT and 190,370MT of crude allocated to them during the period.

In fact, KRPC has remained dormant since June and has only processed crude oil in only three months since the beginning of this year.

Further analysis of the report showed that the refineries’ consolidated loss increased from the N6.96bn that was recorded in June 2016 to N7.06bn in July.

The highest single loss of N2.72bn in July was recorded by the PHRC, while the KRPC and WRPC posted N2.62bn and N1.87bn as losses, respectively.

The NNPC explained that the adverse performance of the plants was due to crude pipeline vandalism in the Niger Delta region coupled with ongoing revamp of the refineries, which had continued to operate at minimal capacities.

“For the month of July 2016, the three refineries produced 139,2841MT of finished petroleum products out of 126,756MT of crude processed and intermediate of 40,640MT at a combined capacity utilisation of 6.74 per cent compared to 12.40 per cent combined capacity utilisation achieved in the month of June 2016,” the report stated.