Nigeria refineries spend N4.9bn on personal, car loans for staff

Despite posting a combined N202.7 billion operating loss and processing no crude, Nigeria’s three refineries in one year handed out to staff N4.93 billion in personal and car loans without interest in two years.

The three refineries located in Warri, Port-Harcourt and Kaduna have a combined production capacity of 445,000 barrels per day (bpd).

Details of the loans were contained in the audited financial statement obtained from the Nigerian National Petroleum Company (NNPC) Limited website.

A breakdown from the report showed that Kaduna refineries alone gave out loans worth N2.171 billion to its employees.

The sum of N1.180 billion was recorded as employees loan in 2020, while another N991 million was recorded in 2021.

A review of the financial statement shows that the company posted N78.6 billion loss.

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An explanation offered by the company for its loans said that “the loans are interest-free loans granted to staff members to purchase motor vehicles, and are usually secured with the employee’s retirement benefit obligation held by the parent company, NNPC”.

Port Harcourt refinery on the other hand recorded N88.97 billion loss in two years while staff enjoyed a N1.37 billion loan.

Breakdowns of staff loans showed they were given to cover staff touring, personal needs, and car and also on compassionate grounds.

N666.59 million was issued in 2021 while staff collected loans worth N704.55 million.

Part of the report on Port Harcourt refinery reads, “The normal term for compassionate loans is one year and that of car loan is maximum of 60 months and these loans are granted at interest free rate.

“The Company is faced with minimal credit risk on these loans as the amounts owed by staff are deducted at source from their remuneration and final entitlement.”

The Warri refinery recorded N35.15 billion operating loss in two years. The refinery issued to its staff a total of N1.38 billion in loans for personal use and to buy a car.

A breakdown shows N637.14 million was given to staff in 2021, while N751.09 million was handed out in 2020.

The management of Warri refinery explained that car and compassionate loans are given to staff without interest and will be liquidated within six years and one year respectively.