An analysis of annual domestic crude oil utilisation has revealed that 88 percent of the Domestic Crude Oil, is refined outside the country. Nigeria has four refineries- Kaduna, Warri and Port-Harcourt. The PHRC is made up of two refineries, located at Alesa Eleme near Port Harcourt with a jetty (for product import and export). The jetty is located 7.5km away from the refinery complex. In 1983, the Port Harcourt refinery with 60,000 barrels per day capacity and the tankage facilities were acquired by NNPC from Shell. Subsequently, a new 150,000 bpsd export refinery was built in 1988 and commissioned in 1989. Therefore, the current combined installed capacity of PHRC is 210,000 bpsd. The installed capacities of KRPC and WRPC are 110,000 bpsd and 125,000 bpsd respectively.
However, the refineries have not been performing at full capacity over the years. As a result, Nigeria channels its crude oil towards exportation, exchange transactions and offshore processing than for local refining. According to findings backed by NNPC’s data, the percentage of Domestic Crude Oil that is not refined in-country ranges from between 50% to 88% between 2002 and 2011. Before spates of attacks on oil and gas pipeline facilities in the country, Nigeria was producing an average of 2.2 million barrels per day, and approximately 2.4 million barrels per day. However, due to bombings by the new militant group, the Niger Delta Avengers, NDA, Business Times findings backed by tips from a top shot in the industry, shows that the country now produces approximately 1.3 million barrels per day as against the 1.6mbpd announced by the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu.
According to the document, in 2002, the amount of crude which fell under the categories of domestic Refinery crude, Quantity exported, Crude Oil-Exchange, Crude –Oil Product Exchange, and Offshore Processing, totalled 164 million barrels. In 2003 it totaled 156 million barrels, 2004- 154 million barrels, 2005- 160 million barrels, 2006- 155 million, 2007- 157 million, 2008- 165 million barrels, 2009- 162 million barrels, 2010- 167 million barrels, and in 2011- 164 million barrels. On Sunday, December 27, 2015, Kachikwu stated that Nigeria will continue to import Premium Motor Spirit popularly known as petrol in 2016 and beyond even with the nations refineries working. Furthermore, speaking on the rate of importation, Kachikwu remarked that: “Best case situation is a twenty five to forty percent of local production and the rest being imported, worst case situation is what we have seen in the last few months of hundred percent importation," he said.
The refineries have a combined capacity of 445,000 bpd but in recent times, they operate at less than 20 percent installed capacity. NNPC said the average capacity utilization of the refineries as, KRPC (Kaduna)- 32.96 percent, PHRC (Port-Hracourt)- 4.48 percent and WRPC (Warri)- 40.41 percent. Even when the refineries are functioning at full capacity, NNPC disclosed that their cumulative capacity is 19 million litres of petrol per day. Nigeria reportedly consumes 40 million litres per day. Figures of Petroleum Product Pricing Regulatory Agency, PPPRA, showed that the daily consumption in 2011 was 60.25 million litres. It was reduced to 39.79million litres in 2012, while in 2013, the agency recorded 42.11 million litres per day which was 18.14 million litres per day less than what was recorded in 2011. Since the four refineries could not produce these volumes, the country is forced to rely on importation and oil swap to make up for the deficit of about 21 million litres per day. The importation swap with oil marketers, gave birth to subsidies by the Federal Government to reduce the cost paid by an average consumer.