Refineries: Senate probes NNPC over $396m Turn-Around maintenance

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The Senate on Thursday agreed to probe the Nigerian National Petroleum Corporation over the $396m expended on Turn-Around Maintenance of refineries in the country between 2013 and 2015.

The red chamber also mandated the committees on Petroleum Downstream, Upstream, and Gas to carry out a holistic investigation on the expenditure incurred by the Federal Government, within the period under consideration.

The Senate panels were also mandated to assess 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 spendings on the maintenance of refineries by the Corporation was reached after consideration of a motion brought to the floor by Senator Yusuf Yusuf.

The Senator noted that the Nigerian National Petroleum Corporation has four refineries: two in Port-Harcourt and one each in Kaduna and Warri.

According to him, the refineries were established to adequately supply and serve the needs of Liquefied Petroleum Gas, Premium Motor Spirit, Dual Purpose Kerosene, Automotive Gas Oil, Low Pour Fuel Oil, High Pour Fuel Oil and Aviation Turbine Kerosene for both local consumption and exports.

He said, “The country through the NNPC has in the past 25 years, spent billions of US dollars in Turn-Around Maintenance of the refineries, the latest being over $396m spent between 2013 and 2015 without meaningful result.

“The refineries have remained in the 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.

“Despite the huge spending on turn-around Maintenance of refineries, NNPC recently announced a cumulative loss of N123.25 bn in 10 months (January to October 2019).

“This has put the total revenue of facilities at N68.82 bn, while total expenses incurred were N192.1bn within the same period.

“Such huge wastage and slippages amidst the nation’s tight economy, if not addressed, may lead the country back to recession.”

In his contribution, Senator Ibikunle Amosun, said the country lacked maintenance culture.

He said it was not the first time attention was drawn to the near-collapse of the refineries in the country.

He urged his colleagues to do a thorough job during the investigation process.

Amosun said, “Oil should be a blessing to us but in Nigeria, it makes a lot of establishments lazy.

“We should be concerned about it. The refineries are bad and people are now taking the crude outside the country and bringing back refined product to the country on an exorbitant prices.

“The downstream committee should critically look at the problem.”

Amosun said that $25bn went down the drain in turnaround maintenance of the refineries in the last 25 years,.

He said the Federal Government must ensure that all the strategic assets in the country work including the refineries for good revenue generation.

“It will be on the interest of all of us to increase the internally generated revenue,” Amosun added.

Senate President, Ahmad Lawan said the Petroleum Industry Bill would be worked upon in February.

He added that there were issues that will occupy the committee members saddled with the responsibility of investigating the state of the refineries.

He urged them to do a thorough job and report back to the Senate within four weeks.