By Michael Eboh
NIGERIA earned N5.46 trillion from the petroleum sector in six years, from 2010 to 2015, according to report obtained from the Department of Petroleum Resources, DPR.
According the report, the amount was revenue accruing to the Federation Account from oil and gas royalties, gas flare penalty, concession rentals and miscellaneous oil revenue.
Particularly, for the six-year period, royalty from crude oil accounted for 97.14 per cent of the industry’s total revenue, with N5.305 trillion, while earnings from gas royalty stood at N103.5 billion.
The country’s revenue from gas flared penalty over the period stood at N18.362 billion, while earnings from concession rentals and miscellaneous oil revenue stood at N2.354 billion and N31.85 billion respectively.
The DPR report pointed out that the least revenue from the petroleum sector in the six-year period was recorded in 2015, with a revenue of N587.635 billion, dropping by 42.18 per cent or a decline of N429 billion from total petroleum revenue of N1.017 trillion recorded in 2014.
This can be attributed to the low price of crude oil in the global market, incessant vandalisation of petroleum assets and the crisis in the Niger Delta region.
Giving a breakdown of total revenue from the petroleum industry on a year-on-year basis, the DPR stated that N698.42 billion, N1.087 trillion and N1.079 trillion revenue were recorded in 2010, 2011 and 2012 respectively, while in 2013, 2014 and 2015, the country earned N991.057 billion, N1.017 trillion and N587.635 billion respectively.
Furthermore, in its analysis of the performance of the country’s refineries, the DPR disclosed that the refineries produced 21,623.87 barrels per stream day, bpsd, of crude oil in 2015, representing 4.85 per cent of their total combined installed capacity.
The refineries are the Kaduna Refinery and Petrochemical Company, KRPC, Port Harcourt Refining Company, PHRC, Warri Refinery and Petrochemical Company, WRPC and the Niger Delta Petroleum Refinery.
Specifically, the DPR disclosed that the three refineries were only able to produce 377.89 million litres of Premium Motor Spirit, also known as petrol, representing less than 10 days of Nigeria’s 40 million litres per day consumption figure in 2015.
The refineries, according to the DPR, also produced 201.567 million litres of Dual Purpose Kerosene, DPK and 298.313 million litres of Automotive Gasoline Oil, AGO, in 2015.
In the area of PMS production, the DPR explained that the Kaduna Refinery accounted for 40,663.68 metric tonnes of the commodity; Port Harcourt Refinery produced 156,379.57 metric tonnes and Warri Refinery, 84,758 metric tonnes of PMS, bringing the total to 281,801.64 metric tonnes, an equivalent of 377.9 million litres.
Commenting on the development, Director, Petroleum Resources, Mr. Mordecai Ladan, lamented that the contributions of local refineries to the products market remained low in 2015, blaming the dismal refining figures on the low pump prices due to the price-capping policy of the subsidy regime.
According to him, the country’s refining capacity is expected to improve with the recent new pricing mechanism that now offers a higher profit margin to the refineries and marketers.
He said, “Demand for refined products and the middle distillates have risen in the last decade. However, most refineries still grapple with the challenges of rising costs. The increasingly stringent environmental regulations are also posing additional challenges for some operators.
“The Nigerian refineries are plagued with peculiar domestic challenges. Most of the refineries were established back in the 1970s and now produce at sub-optimal levels partly due to the increasingly aging plants. Incessant disruption of crude oil and product pipelines has posed further challenges to operations.
“Government is committed to tackling all the associated challenges facing the effective development of the domestic refinery sub-sector by promoting the business-friendly environment that is capable of driving the growth that will ensure the emergence of Nigeria as a refining hub in Africa.”