Workers at the government-owned refineries were paid a total of N69.07bn last year, even as the plants generated zero revenue as they did not process a single barrel of crude oil.
The refineries suffered a combined loss of N108.29bn in 2020, compared to N162.22bn in the previous year, according to data collated from their audited financial statements released by the Nigerian National Petroleum Corporation on Wednesday.
The plants, which are located in Port Harcourt, Kaduna and Warri, have a combined installed capacity of 445,000 barrels per day but have been in a state of disrepair for many years.
Kaduna Refining and Petrochemical Company reported a loss after tax of N55.77bn last year; Port Harcourt Refining Company recorded N28.67bn loss; and Warri Refining and Petrochemical Company posted a loss of N23.85bn.
Salaries, wages and other fringe benefits paid to Kaduna refinery workers fell to N26.02bn in 2020 from N34.52bn in the previous year.
Port Harcourt refinery put its aggregate payroll costs (wages, salaries and allowances, redundancy and pension costs) at N22.55bn, up from N18.62bn a year earlier.
Warri refinery said its aggregate costs of employees, comprising direct labour cost and indirect labour and staff welfare cost, dropped to N20.51bn last year from N30.86bn in 2019.
“For the year 2020, the company did not earn any income through shutdown of the plants and the ongoing turnaround maintenance,” KRPC said.
According to the financial statements, the company relies on short-term funding from NNPC to meet its obligations as and when due.
“Although the funding arrangement is short term in nature, the directors, based on historical patterns and continued discussions, with the parent, believe that the funding will be available for at least the next one year,” it said.
PHRC said the N28.674bn loss it incurred last year arose “principally from the inability of the company to refine single drop of crude in the year 2020 and other previous years in quantities and at rates above its break-even points, hence it was unable to earn enough revenue to cover its costs.”
“However, the parent company, Nigerian National Petroleum Corporation is committed to continuing to support the sustenance of its operations through adequate funding,” it said.
The company noted that the Federal Government had approved the sum of $1.5bn to rehabilitate the aging plants towards productive and profitable use.
“Without doubt, if this plan is fully executed, the reoccurring losses will stop in the year 2023, which is the expected date of completing the phase one of the rehabilitation project,” it added.
According to PHRC, the NNPC provided N107.86bn as of December 2020 to the company under a funding arrangement that is interest-free.
“An amount of N448bn is due from the company to the NNPC as at December 2020 and N361bn in year 2019 under this arrangement,” it said.
Source:- Punch Ng
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