TAM: Senate probes NNPC over $396m spent on refineries

The Nigerian National Petroleum Corporation (NNPC) is to account for the over the sum of $396 million expended on Turn-Around Maintenance of refineries in the country between 2013 and 2015.

To this end, the Senate on Thursday mandated its 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.

The decision to investigate spending on maintenance of refineries by the Corporation was reached after consideration of a motion brought to the floor by Senator Yusuf A. Yusuf (APC, Taraba Central).

The lawmaker noted that the Nigerian National Petroleum Corporation has four refineries: two in Port-Harcourt (PHRC) and one each in Kaduna (KRPC) and Warri (WRPC).

According to him, 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 recalled, “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.”

The lawmaker lamented that “the refineries have remained in moribund state in the last 15-20 years and is almost reaching total collapse due to lack of proper maintenance of the facilities with a poor average capacity utilization hovering between fifteen per cent and twenty-five per cent 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.”

The lawmaker added that 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.