Nigeria’s refineries were shut down due to inefficiency, rather than being completely non-functional, according to Festus Osifo, President of the Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN. In an interview on Channels Television’s Politics Today programme, Osifo explained that the facilities had been operating, but not at optimal levels.
Osifo noted that crude oil was supplied to the plants, but the output did not match the value of the input, resulting in continuous losses. He cited an example where $10 million worth of crude oil was supplied, but the refined products produced were valued at only $9.5 million. This discrepancy led to the decision to shut down the refineries, Osifo said.
The PENGASSAN president, who has over 20 years of experience as an engineer, emphasized that there is a difference between a system working and working efficiently. He stated that the refineries were not completely non-functional, but rather, they were not producing at optimal levels. Osifo attributed this to a poor material balance, where the value of the input did not match the value of the output.
During a recent meeting with the new Group Chief Executive Officer of NNPC Limited, Osifo said that the management confirmed that the decision to suspend operations was taken to reassess strategy and improve efficiency. The move is aimed at reexamining the refineries’ operations and finding ways to increase productivity and reduce losses.
The shutdown of Nigeria’s refineries has significant implications for the country’s oil and gas industry. The refineries’ inability to produce at optimal levels has resulted in a reliance on imported refined products, which has put a strain on the country’s economy. The decision to reassess strategy and improve efficiency is a step towards addressing these challenges and increasing the country’s self-sufficiency in refined products.
The development is also a testament to the need for effective management and maintenance of the country’s oil and gas infrastructure. As Nigeria continues to navigate the challenges of the oil and gas industry, the efficient operation of its refineries will be crucial in driving economic growth and development. With the refineries currently shut down, attention will be focused on the efforts to improve efficiency and increase productivity, with the goal of getting the facilities back online and producing at optimal levels.