Recent reports show that three Nigerian refineries located in Port-Harcourt, Warri, and Kaduna have approved a ₦4.9 billion loan for employees.
The data came from the refineries’ financials which stated that managers had approved the loan. This news is coming in despite Nigerian refineries experiencing massive operational losses. Still, it hasn’t stopped them from giving out car and personal loans to its employees.
These three Nigerian refineries have been unable to process a single crude in the past three years. They’ve reported a combined operating loss of ₦202.7 Billion.
According to the report, the refinery in Kaduna gave out a total of ₦2.171 billion in the car and personal loans to its employees while reporting a two-year operational loss of ₦78.6 Billion.
The breakdown shows that employee car and personal loans totalled ₦1.180 Billion in 2020, with another ₦991,000,000 million in 2021.
Here’s the explanation offered by the company for its loan,
“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.”
The Port Harcourt refinery also experienced an operational loss of ₦88.97 Billion for two years, yet employees got ₦1.37 Billion for car loans.
In 2021, ₦666.59 million was issued, while the employees received ₦704.55 million in the car and personal loans. The Port Harcourt refinery states,
“The normal term for compassionate loans is one year, and that of a car loan is a maximum of 60 months, and these loans are granted at interest-free rate. The Company faces minimal credit risk on these loans as the amounts owed by staff are deducted at source from their remuneration and final retirement.”
On the other hand, the Warri refinery suffered a ₦35.15 Billion operational loss within 2 years. However, the managers at the refinery gave employees a total of ₦1.38 Billion in car and personal loans.
A breakdown shows ₦637,140,000 million in loans were given to staff in 2021 and ₦751,090,000 in 2020.
The refinery in Warri also explained that car and personal loans are given to employees without additional interest and will be repaid in six years and one year, respectively.