Reps decry controversy trailing return of fuel subsidy

The House of Representatives on Wednesday expressed grave concern over the controversy trailing the resuscitation of fuel subsidy on Premium Motor Spirit (PMS) as well as allegation bothering on the diversion of crude oil at Warri Refinery, in Delta State.

The House in-session who expressed displeasure over the myriad of challenges facing the shutdown of the dyfunctionality of the domestic refineries, mandated its Committee on Petroleum Resources (Upstream) to investigate the activities of Nigerian National Petroleum Corporation (NNPC) on the operations of the haulage challenges, inadequate storage tanks affecting the Warri refining and petrochemical company in the bid to forestall the frequent shutting down of the refinery.

The resolution was passed sequel to the adoption of a motion on the ‘Commencement of Operations at the Warri Refining and Petrochemical Company,’ sponsored by Hon. Ben Igbakpa.

In his lead debate, Hon. Igbakpa who decried the challenges bedeviling the Warri Refining and Petrochemical Company which was mandated to produce refined products from mainly local crude. The three main sections of the production department, namely: reforming, crude distillation and catalytic cracking units have operated for the past 8 years due to the efforts of its personnel.

“The House is aware that the Plants were operating at an output of around 115m3/hour which translates to about 68% installed capacity. Products that were being supplied from the Refinery included: Premium Motor Spirit (PMS) or Petrol, Automotive Gas Oil (AGO), Kerosene (DPK), LPG, Low Pour Fuel Oil (LPFO) for Ships and Industrial Fuel and Carbon Black.

“The House is disturbed that the refinery has not operate optimally due to allegedly top Management decisions of the Nigerian National Petroleum Corporation to ground the plant for personal benefit from marketers importing products that can be produced in the refinery.

“The House is concerned that the plant had severally shut down due to haulage challenges, neglect in the evacuation of products, lack of functional or operational storage tanks and poor maintenance culture on the part of management which also constitutes another reason for the refinery non – functionality.

“The House is aware of the alleged plan to ground the plant from refining products by members of the top echelon of the Warri Refinery in collaboration with the Chief Operating Officer (COO) as well as diverting crude meant for refining.

“The House is also aware that when crude oil is delivered from Escravos tank farm for refining, the products are hoarded for about 14 days and thereafter diverted through the refinery jetty to interested buyers (or specific companies they have special interests in) who pay less. The resultant effects of this perceived economic sabotage is that the plant is brought down because no crude to refine as it has been diverted.

“The House is further aware that when it became apparent that the management of Warri Refinery have abandoned their responsibility of maintaining the Plant, the staff of the Refinery on several occasions contributed their monies to buy materials and tools to fix faulty equipment.

“The House is alarmed that currently, most of the spherical tanks used for storage of Liquefied Petroleum Gas (LPG) have been leased out to Kwale Hydrocarbon Nigeria Limited (KHNL), a private company while other storage tanks are being leased out to private interests all in a bid to ensure that the Warri Refining and petrochemical company remains shut down indefinitely, even when the said Refinery has the production capacity of 75 per cent.

“The House is cognizant that the Federal Government has officially confirmed the return of fuel subsidy, as the Petroleum Products Pricing Regulatory Agency (PPPRA) has on 11 March 2021 fixed the pump price of PMS also known as petrol, at N212.61 per liter, for March, which the Minister of State for Petroleum Resources and NNPC has denied yet petroleum marketers sell between N175 – N200 depending on the location.

“The House is also cognizant that the increase is due to the shutdown of local refineries and create the cost elements of the commodity which the Petroleum Products Price Regulatory Agency (PPPRA) analyzed as comprising the addition to the ex-coastal price of average lightering expenses, Nigerian Maritime Administration (NIMASA) charges, jetty throughput charges, storage charge and average financing costs with the inclusion of retailers’ margin has now brought the pump price of the commodity to 212.61 per litre.

“The House believes that all that was required was routine maintenance to further improve the operating capacity of the refinery which the local manpower was very capable of providing and have demonstrated same overtime to make the price of Premium Motor Spirit (PMS) affordable.

“The House also believes that the commencement of local production will help to mitigate the incessant and upward price adjustment of the petroleum products, ameliorate the hardship and inflation that comes with such exercise to Nigeria and Nigerians,” he posited.

To this end, the House urged NNPC Group Managing Director to immediately commence operation of the Plant to improve on the production capacity before the suspicious shutdown.

The lawmakers also underscored the need for the NNPC helmsman to furnish the Committee on Petroleum Resources (Upstream) with details and circumstances surrounding the storage lease which are not disposing of the company.

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