Three of Nigeria's refineries restart production: official

Three of Nigeria's four refineries have resumed production and are performing at between 60 and 80 percent of their installed capacities, state-run oil firm NNPC said (AFP Photo/Pius Utomi Ekpei)

Abuja (AFP) - Three of Nigeria's four refineries have resumed production and are performing at between 60 and 80 percent of their installed capacities, state-run oil firm NNPC said Wednesday.

The Nigerian National Petroleum Corporation (NNPC) said in a statement that the refineries -- largely moribund for several years -- have commenced preliminary production of petroleum products after test runs in the southern oil cities of Port Harcourt and Warri.

While the two joint refineries in Port Harcourt are ramping up operation to about 60 percent of their 210,000 barrels per day (bpd) capacity, their Warri counterpart is projected to hit 80 percent of its installed 125,000 bpd capacity, the statement said.

The NNPC said that the phased rehabilitation of the refineries started last October, adding that a fourth, the 110,000 bpd capacity Kaduna refinery, was expected to come on stream "soon".

The nation's four refineries have a combined installed capacity of 445,000 bpd.

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.

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.

It is hoped that the resumption of refinery activity will improve the supply of fuel in Africa's largest oil producer and allow the country to make savings on refined fuel and other petroleum products.