The Nigerian National Petroleum Corporation (NNPC) has said that that it spent the sum of $396 million on refineries turn around maintenance in the last ten years. It also said that it is the Federal Government that is paying subsidy on petrol and not the corporation. Addressing the House of Representatives’ Ad-hoc Committee investigating the status of the nations four refineries, Chief Operating Officer in charge of Refineries, Mr. Anibor Kragha, who represented the NNPC, stated that it is the Federal Government that is responsible for subsidy payment, and not the Corporation
However, in the TAM record sent to the Committee, Chaired by Mohammed Datti (APC-Kaduna), the NNPC did not include the cost of the TAM carried out during the last administration. In the breakdown of the expenses, NNPC stated that out of total sum of $182.730 million proposed for old and new Port Harcourt refineries, the sum of $157.641 million was spent; while $151.170 million was spent for Warri refinery.
The NNPC further noted that out of the sum of $91.5 million proposed for the Kaduna Refinery, $87.517 million was spent.
As a result of this, President of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), Comrade Olabode Johnson, proposed two models of refinery management in order to end the perennial challenges facing the four refineries. While stressing that the four refineries are ‘running on a faulty business model,’ Johnson argued that solving the TAM is a short term solution, thus the need to have a holistic solution that is long term and sustainable.”
According to Johnson, some of the challenges bedeviling the refineries include: lack of operational autonomy, unnecessary bureaucracy, unsteady crude oil supply, delay in evacuation of refined products leading to shut down of refineries as well as ageing manpower leading to knowledge gap. Johnson who was represented by Timothy Jayeoba, member of the PENGASSAN Central Board, stressed the need for adoption of public private partnership (PPP) as well as NNPC’s financing model up to 10 years.
On the status of the four refineries, Johnson who quoted the NNPC’s data, stated that the average functional utilisation of the refineries as at 2017 was 20 percent. He also proposed government ownership of 100 per cent equity alongside private sector handling the operation and maintenance. He however recommended the adoption of functional models operational in South Korea, Cote d’Ivoire, South Africa, Indonesia.
While noting that the age of the refineries do not have to do with its functionality, Johnson blames NNPC for failing to conduct and adhere to the two year turn around maintenance. In his intervention, Mohammed Datti, Chairman of the Ad-hoc Committee directed the NNPC to submit certificate of completion of various contracts awarded, 5-year audited account of the four refineries with the view to ascertain compliance with the Public Procurement Act, 2007. While frowning at the argument of the Corporation that there was no money for the Turn Around Maintenance of the refineries, Datti wondered where the Corporation sourced the money for payment of subsidy to the tune of trillions of naira.
Wole Oke, member of the Committee blamed the Parliament for failing to sharpen Executive policies, On his part, Ibrahim Isiaka, member of the Committee alleged that most public officers responsible for the management of public resources try to defend their failures. The committee however gave the Corporation one week ultimatum to comply and revert back to the Committee.
