Nigerian refineries spent N127bn on salaries, and other staff benefit in 2 years without producing oil

Nigeria’s refinery challenges continue, with the country’s facilities struggling to operate effectively.

An investigation by news outlets reveals that, despite their inability to process crude oil or generate revenue, these refineries have expended billions on employee compensation.

Analysis of audited financial statements from the Nigeria National Petroleum Company (NNPC) shows that between 2020 and 2021, the Kaduna, Port Harcourt, and Warri refineries collectively spent N127.326 billion on salaries, wages, and employee benefits.

In September 2020, significant funds were allocated for salaries and wages, even though all four of Nigeria’s refineries were shut down, raising questions about the justification for such expenses when the facilities were inactive.

Additionally, in June 2022, the NNPC Chief Executive Officer confirmed that none of the refineries were operational, further questioning the need for such high personnel costs.

Financial reports indicate that the Port Harcourt Refinery Company spent N22.547 billion on salaries, wages, and benefits in 2020, and N32.023 billion in 2021. The Warri Refinery Company spent N12 billion in 2020 and N14 billion in 2021 on similar expenses. The Kaduna Refinery Company reported costs of N26 billion in 2020 and N20 billion in 2021.

Moreover, the Kaduna Refinery Company issued employee loans totaling N2.2 billion between 2020 and 2021, with N1.180 billion in 2020 and N991 million in 2021.

Despite repeated government promises to revitalize the refineries, progress remains stalled. The Port Harcourt refinery, for example, has faced delays in its revival, now postponed for the sixth time, extending the wait for its operational restoration.