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Nigeria's refineries to resume production next month

18 June 2015, 21:28

Lagos - Nigeria's four refineries will resume production next month, a spokesman for the state-run oil group said Thursday, raising hope of an end to perennial petrol shortages that have plagued Africa's largest crude producer.

"The refineries at Warri, Port Harcourt and Kaduna will resume next month after a successful turn-around-maintenance (overhaul) of their facilities," Ohi Alegbe of the Nigerian National Petroleum Corporation (NNPC) told AFP.

"The turn-around-maintenance has been on for some time. We did not just want to make any noise about it. The refineries will start production as soon as they have delivery of crude oil for refining," he said.

The NNPC has four refineries, two in Port Harcourt in the south, one in northern Kaduna and another in southern Warri, with a combined installed capacity of 445,000 barrels per day.

A network of pipelines and depots located throughout the country link these refineries.

Also read: JTF destroys 32 illegal refineries in Delta

Nigeria produces a massive two million barrels of crude oil a day, but has to export it due to a lack of working refineries. It then imports fuel back into the country at international market prices, a situation blamed on corruption and mismanagement.

To cushion the blow on the general population, the government sells fuel on the streets at subsidised prices, and makes up for the higher amounts spent by importers by reimbursing them the difference, a system seen as rife with false claims and overpayments.

Last month, a crippling fuel shortage almost grounded Nigeria to a halt, as fuel importers and marketers shut their depots to protest some $1 billion (900 million euros) in unpaid reimbursements.

Black market and legitimate petrol vendors did a brisk trade, selling at around 300 naira ($1.5; 1.3 euros) a litre -- well above the officially-set price of 87 naira.

In January 2012, the government tried to end the subsidies, causing petrol prices to more than double. It was ultimately forced to reinstate the payments after tens of thousands of people took to the streets in violent protests that left more than a dozen dead.

Alegbe said the resumption of refinery activity "will significantly improve the supply of petroleum products in the country."



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