The Nigerian National Petroleum Company Limited traded crude oil worth N2.6 trillion for refined petroleum products in 2021, according to the most recent data from the Nigeria Extractive Industries Transparency Initiative, an organization under the federal government.
The Punch reported that according to data on crude oil output taken from the NEITI’s recently issued 2021 Oil and Gas Report, the national oil firm did not ship any crude oil to Nigeria’s refineries throughout the time period under consideration.
However, NEITI said that NNPCL may not have supplied oil to domestic refineries at the time because those facilities were not in use.
Although restoration is underway, Nigeria’s refineries at Port Harcourt, Kaduna, and Warri have remained idle for years.
According to the NEITI study, the oil company used its Direct Sale Direct Purchase program to exchange crude oil from Nigeria for refined goods. It also revealed that the amount of crude oil sold during the review period was N2.23 trillion.
In its most recent report, NEITI commented on this situation and stated that “NNPC allocated a total of 98.92 million barrels of crude oil valued at $7.11bn (N2.73tn) for the local market in 2021. But in 2021, no crude was delivered to any of the local refineries.
“Instead, under the DSDP arrangement, NNPC used 95.25 percent of this oil for crude exchange for products in the international market, and 4.75 percent was sold there.
“This might be because none of the refineries were running in 2021. Actual domestic crude sales revenue for 2021 was N2.23 trillion ($5.85 billion), of which N1.64 trillion ($4.30 billion) reflects sales revenue for 2021 and N588.68 billion ($1.55 billion) refers to the settlement of prior year receivables.”
The study also revealed that in 2021, the NNPCL lifted and exported for the Federation a total of 24.84 million barrels of crude oil worth $1.70 billion.
According to the statement, the sum of $1.58 billion was identified as the real sales receipt for 2021, of which $1.55 billion represents 2021 sales receipts and the remaining $24.32 million relates to the settlement of prior year receivables.
“We’ll keep pushing for the renovation of our refineries. According to the National Public Relations Officer of the Independent Petroleum Marketers Association of Nigeria, Chief Chinedu Ukadike, “If our refineries are operating, the crash of the naira against the dollar would lessen because the demand pressure for dollars by marketers will drop.”
“Likewise, we won’t need this DSDP thing, since we’ll be refining our products here in Nigeria and not exchanging our crude with anyone or any company overseas,” he continued.
According to the Deputy Chairman of the Oil Refinery Owners Association of Nigeria, Mrs. Dolapo Kotun, modular refineries would continue to be profitable even when the Dangote Refinery, which is expected to start operating soon and generate 650,000 barrels of oil per day, comes online.
As the Chairperson, Downstream, Women in Energy, Oil and Gas, and Executive Director, Operations, Ikwe-Onna Refinery Ltd., Kotun declared: “Modular refineries are extremely viable and necessary in securing Nigeria’s energy needs now and in the future. In contrast to the Dangote Refinery, they are localized among a number of locations in the Niger Delta region.
“Because of this, these modular refineries will be able to immediately provide world-grade quality refined petroleum products to the local markets around their different refinery sites.”
