Senate probes $396million refinery maintenance fee by NNPC
The Senate has directed its Committees on Petroleum Resources to investigate the expenditure of over $396 million on the Turn Around Maintenance (TAM) of the nation’s four refineries between 2013 and 2015.
This move followed a motion titled: “The moribund refineries in the country,” sponsored by Senator Yusuf Abubakar Yusuf, representing Taraba Central Senatorial District.
Yusuf, in his lead debate, noted that the country has four petroleum refineries with two located in Port Harcourt and one each in Kaduna and Warri respectively.
He noted that the refineries were established to adequately supply and serve needs for Liquefied Petroleum Gas (LPG), Premium Motor Spirit (PMS), Dual Purpose Kerosene (DPK), Automotive Gas Oil (AGO), Low Pour Fuel Oil (LPFO), High Pour Fuel Oil (HPFO) and Aviation Turbine Kerosene (ATK) for both local consumption and exports.
He lamented that despite the alleged spending of $396million for TAM of the refineries between 2013 and 2015 there is no tangible result to show in terms of local production.
He insisted that the amounts being expended on TAM of the refineries in the last 25 years notwithstanding, Nigeria is still solely dependent on importation of petroleum products for domestic use.
He said that the country will likely slide into recession once again if the humongous amount for TAM is added to the huge ‘under recoveries’ presently being incurred by the NNPC in the importation of petroleum products, put at over N123.25 billion.
“The country through NNPC has in the past 25 years spent Billions of US dollars in Turn-Around Maintenance of the refineries, the latest being over $396 million spent between 2013 and 2015 without meaningful result,” Yusuf said.
He added that “the refineries have remained in moribund state in the last 15-20 years and is almost reaching total collapse due to lack of proposer maintenance of the facilities with a poor average capacity utilization hovering between fifteen percent and twenty-five percent per annum.”
Senator Yusuf said “despite the huge spending on turn-around Maintenance of refineries, NNPC recently announced a cumulative loss of N123.25 billion in 10 months (January to October, 2019), putting the total revenue of facilities at N68.82 billion, while total expenses incurred was N192.1 billion within the same period.”
He warned that “such huge wastage and slippages amidst the nation’s tight economy, if not addressed, may lead the country back to recession.”
“Such losses, when averted and combined with the huge expenditures in ‘under recovery’ on fuel pump price and properly channeled into full rehabilitation and construction of modern refineries, would positively impact on the economy and save the country from the embarrassment of importation of petroleum products and its ripple effect,” he said.
In his contribution, Senator Ibikunle Amosun (Ogun Central) said one of the challenges confronting the country is lack of maintenance culture.
He said it was not the first time attention was being drawn to the near collapse of the refineries in the country.
He urged his colleagues to do a thorough job during the investigation process.
“Oil should be a blessing to us but in Nigeria, it makes a lot of establishments lazy. We should be concern about it.
“The refineries are bad and people are now taking the crude outside the country and bringing back refined products to the country on exorbitant prices,” Amosun said.
The upper chamber In its resolutions mandated the Committee on Petroleum Downstream, Upstream and Gas to carry out a holistic investigation on the Turn-Around Maintenance expenditures and the current state of the refineries as well as convoke a stakeholders conference with the aim of finding ways to revamp them.