The Nigerian National Petroleum Corporation, NNPC, Tuesday, says that the Federal Government and not the corporation is responsible for payment of subsidy on petrol to marketers.
Addressing the House of Representatives’ Ad-hoc Committee investigating the status of the nation’s four refineries, Mr. Anibor Kragha, Chief Operating Officer in-charge of Refineries, who represented the NNPC, admitted that it was the Federal Government and not the corporation is paying the subsidy.
The NNPC also says it spent $396.33 million on Turn-Around Maintenance, TAM, for the country’s four refineries between 1998 and 2008.
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 $182.730 million proposed for old and new Port Harcourt refineries, $157.641 million was spent, while $151.170 million was spent on Warri refinery.
The NNPC further stated that out of the $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, Mr Olabode Johnson, proposed two models of refinery management in order to end the perennial challenges facing the four refineries.
Stressing that the four refineries were ‘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 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 said that the average functional utilization 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 recommended the adoption of functional models operational in South Korea, Cote d’Ivoire, South Africa and Indonesia.
Noting that the age of the refineries has nothing to with its functionality, Johnson blamed 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, five-year audited account of the four refineries with the view to ascertain compliance with the Public Procurement Act, 2007.
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 also blamed the parliament for failing to sharpen executive policies.
