N136bn for workers of moribund refineries

LAST week, yet another picture of the wastage cultivated by the Federal Government emerged as a news report revealed that even with the country’s refineries shut down, the Nigerian National Petroleum Company Limited (NNPCL) may have left over N136 billion as operational deficits across its three refineries in Kaduna, Port Harcourt and Warri. The company, which has shut down the 445,000-capacity refineries for over two years, retains the over 1,701 staff at the facilities as it continues rehabilitation works at the Port Harcourt refinery for $1.5 billion and at the Warri and Kaduna refineries for $1.4 billion. As of 2021, the company was reported to have about  660 staff at the Kaduna Refining and Petrochemical Company (KRPC), 506 at the Port Harcourt Refining Company (PHRC) and 437 at the Warri Refining and Petrochemical Company (WRPC). In November 2020, its Chief Executive Officer, Mele Kyari, indicated that the refineries were shut down because their operations were no longer sustainable.

Instructively, as oil-producing countries in the world raked in huge profits from the high oil prices at the international market, NNPC announced that it had deposited nothing into the government’s account in six months. In its Federation Accounts Allocation Committee (FAAC) presentation, the company said that the N2.38 trillion revenue  made from oil sales was expended on projects, including the repair of refineries, pipeline security and maintenance cost, frontier exploration services, national domestic gas development, and cost recovery, the Morocco Pipeline, Renewable Energy Development (RED), pre-export financing, gas infrastructure development and crude oil pre-export inspection agency fees. Fuel subsidy gulped N1.59 trillion, as subsidy payments rose from N210 billion in January 2022 to N319 billion in June 2022, while cost recovery/cash call stood at N658.97 billion. Pipeline security cost N12.42 billion and frontier exploration (oil search) N14.32 billion. Naturally, the lack of remittance by NNPC to government accounts means that most of the country’s 36 states cannot meet their financial obligations.

The situation at the NNPCL is yet another show of shame. The fact that the authorities have been unable to fix the refineries for decades shows that they have been neither focused nor resourceful. If the right thing had been done, the ugly spectre of humongous payments for work not done would have been averted. It is disturbing that even as many Nigerians struggle to eke out an existence, the country is expending huge funds in maintaining unprofitable refineries and idle workers. There is an acute lack of capacity, vision and acumen in governmental circles. Just how could leaders have allowed such colossal wastage and reckless abandonment and neglect of strategic national progress assets?

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Sadly, there has been no consequence for those that have brought the oil sector to its knees. Instead, they remain great players in the industry and in other critical areas of the national economy. The refineries remain moribund amidst intractable upgrades put at over $3 billion. Nigerians benefit nothing from the refineries as it continues to import all its refined petroleum products, and yet has to pay salaries to workers not doing anything at the facilities that the government pretends to be upgrading. This is a major emblem of the disaster that is called governance and government in Nigeria.  The country is run without regard to accountability and decorum as there is no consequence for negative behaviour. No society functions well or develops where its resources are flagrantly wasted by leaders and where government carries on as if nothing is amiss in the way it conducts itself.

The country is the worse for all the mismanagement and we can only hope that the time will come in the not too distant future when there will be  a shift towards enforced accountability and recompense for all those involved in the monumental waste of its resources.