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Sunday, February 25, 2024

NNPC commences crude supply for Port Harcourt Refinery test-run, awaits commercial production

Oil marketers confirm refinery's test phase, experts predict reduction in product costs but rule out massive price crash

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The Nigerian National Petroleum Company Limited (NNPC) has initiated crude oil supply for the test run of the Port Harcourt Refining Company Limited, according to oil marketers. The refinery is set to produce refined products, including petrol and diesel, for 12 states, including Abia, Rivers, Akwa Ibom, and Delta.

The NNPCL assured that the ongoing test run would conclude shortly, paving the way for commercial production of refined products. Despite expectations of reduced costs with the Port Harcourt and Dangote refineries coming online, experts suggest that it may not lead to a significant price crash.

The Federal Government had earlier announced the mechanical completion of rehabilitation work on the Port Harcourt Refinery’s Area-5 Plant, with plans to refine 60,000 barrels of crude oil daily after the Christmas break. The Minister of State for Petroleum Resources, Senator Heineken Lokpobiri, highlighted the completion of the first phase and the imminent commencement of refined product production.

The President of the Petroleum Products Retail Outlets Owners Association of Nigeria, Billy Gillis-Harry, confirmed the commencement of crude oil supply to the refinery and emphasized that the 60,000 barrels per day production could serve about 12 states.

The NNPCL’s Chief Corporate Communications Officer, Olufemi Soneye, stated that the refinery is undergoing testing in line with international best practices and affirmed the imminent start of commercial production.

Experts and oil marketers foresee a reduction in refined product costs but rule out a massive crash in prices. While acknowledging the potential impact on reducing costs, they suggest that the immediate effect may not be significant. The Dangote refinery is also expected to contribute to lowering costs when it begins delivering refined products.

However, the Nigeria Labour Congress expressed discontent with the Federal Government’s failure to fulfill promises, including the December operation of the Port Harcourt refinery. The NLC criticized the government’s handling of economic policies, minimum wage implementation, and borrowing practices, vowing to advocate for a living wage for Nigerian workers in 2024.

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