Refineries generate zero revenue, as NNPC spend N69b on salaries
Nigerian refineries supervised by the Nigerian National Petroleum Corporation (NNPC) generated zero revenue in 2020, as the Corporation spent N69 billion on salaries, according to the audited financial statements released by the NNPC on Wednesday.
According to the report, workers at the government-owned refineries were paid a total of N69.07 billion last year, even as the plants did not generate any revenue as they did not process a single barrel of crude oil.
The refineries suffered a combined loss of N108.29 billion in 2020, compared to N162.22 billion in the previous year.
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 N55.77 billion last year; Port Harcourt Refining Company recorded N28.67 billion loss; and Warri Refining and Petrochemical Company posted a loss of N23.85 billion.
Salaries, wages and other fringe benefits paid to Kaduna refinery workers fell to N26.02 billion in 2020 from N34.52 billion in the previous year.
Port Harcourt refinery put its aggregate payroll costs (wages, salaries and allowances, redundancy and pension costs) at N22.55 billion, up from N18.62 billion a year earlier.
Warri refinery said its aggregate costs of employees, comprising direct labour cost and indirect labour and staff welfare cost, dropped to N20.51 billion last year from N30.86 billion 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.