Can Port Harcourt refinery run at full capacity?

The Port Harcourt Refining Company has recently come under scrutiny as concerns mount over its operational capacity and pricing strategies. The company insists that its operations were not completely halted but scaled down to facilitate improvements at the facility. However, the Independent Petroleum Marketers Association of Nigeria has voiced its dissatisfaction, stating that they will not buy fuel from the Port Harcourt refinery if prices are set at 1,030 naira per litre, which is about 60 naira higher than fuel produced by the Dangote Petroleum Refinery. Kelvin Emmanuel, CEO of Dairy Hills, shed some light on the situation during an interview with CNBC Africa. One of the key issues highlighted during the interview was the nature of operations at the Port Harcourt refinery. Emmanuel emphasized that what is being done at the facility is not a traditional refinery process. He pointed out that the facility is essentially blending off-spec gasoline with other substances, a practice that is not in line with European Union standards. This has raised questions about the refinery's ability to achieve economies of scale and compete with established refineries such as Dangote's. Another pressing concern discussed was the potential privatization of the Port Harcourt refinery along with the Warri and Kaduna refineries. Emmanuel highlighted the challenges posed by the vandalization of distribution pipelines and questioned the feasibility of maintaining the refineries' crude oil supply obligations. With the refineries having been out of commission for an extended period, doubts have been raised regarding their ability to operate at full capacity. Looking ahead to the future of Nigeria's oil industry, Emmanuel expressed skepticism about the country's oil production volumes and budget benchmarks. He mentioned the low recovery ratio and high unit production costs as significant obstacles facing oil operators in Nigeria. These challenges, coupled with global competition from emerging oil-producing countries, have made it difficult for Nigeria to attract investment in the oil and gas sector. In conclusion, the interview with Kelvin Emmanuel shed light on the complex challenges facing the Port Harcourt refinery and the broader Nigerian oil industry. The need for transparency, efficiency, and competitiveness in the sector is crucial for the country to secure its position in the global oil market.