The Senate on Tuesday resolved to shine a light on the operations of the nation’s four refineries. It constituted an ad hoc committee to investigate all contracts awarded for the rehabilitation of all state-owned refineries to date.
The Red Chamber equally mandated the Committee to be led by Senator Isa Jibrin to ascertain the progress of the ongoing works in all refineries to prevent waste and corruption.
They aim to interrogate the Federal Ministry of Petroleum Resources, the Nigeria Upstream Regulatory Commission, and the Nigeria National Petroleum Company Limited (NNPCL) Bureau of Public Enterprises on the best approach to commercialising and ensuring the profitability of the state-owned refineries.
The resolutions of the Senate followed a motion titled “Urgent Need to investigate the various Turnaround Maintenance (TAM) Projects of Nigerian Refineries to uncover waste and prevent further squandering of scarce public resources.” It was sponsored by Senator Karimi Sunday Steve, representing Kogi West.
The Senate, recalling several TAM projects executed by the federal government, declared that the state-owned refineries in Nigeria have been a significant drain on public finances, depriving the citizens of the benefits of being an oil-producing nation.
It puts the operating costs of the refineries between 2010 and 2020 at N4.8 trillion.
“Between 2010 and the present date, Nigeria is estimated to have spent N11.35 trillion (N11,349,583,186,313.40) excluding other costs in other currencies, which include $592,976,050.00 dollars, 4,877,068.47 euros, and 3,455,656.93 pounds on the renovation of refineries, yet they remain unproductive.
“Also aware that the Federal Government of Nigeria has spent over N6 trillion Naira between 2010 and 2023 on fuel subsidies due to Nigeria’s low refining capacity and has spent almost twice the amount on rehabilitating (turnaround maintenance projects) its refineries in Port Harcourt, Kaduna, and Warri between 2010 and 2022.”
“That despite the moribund state of the four refineries, the operating costs of these refineries between 2010 and 2020 are estimated at N4.8 trillion Naira.
“The refineries are estimated to make a cumulative loss of N1.64 trillion within 4 years.
“Concerned that the Federal Government of Nigeria has carried out rehabilitation projects in Port Harcourt Refinery Company (PHRC) over a period of seven (7) years from 2013-2019 at an estimated cost of N12,161,237,811.61 only.
In addition, on March 18, 2021, a rehabilitation contract was executed between NNPC/PHRC and Tencnimont SPA at a lump sum of $1,397,000,000.00 (about N75 billion Naira) amidst global public criticism. Phase 1 of the project is expected to be completed 28 months after the contract, Phase 2 within 24 months, and Phase 3 within 44 months of execution.
Despite this, the Port Harcourt Refinery remains a money pit. According to projections and representations from NNPCL, the renovation works ought to be completed, and operations at the refinery should commence by June 2023.
“Perturbed that, in a bid to revitalise the Warri Refinery, the Federal Government has injected significant public funds into revamping Warri Refinery & Petrochemical Company Limited to the tune of over N28,219,110,067.10 between 2014 and 2019.
“That particularly, around June 24, 2022, the Federal Executive awarded Maintenance Services for Quick Fix Repairs of Warri Refinery to Daewoo Engineering and Construction Limited at $497,328,500.00. Yet, at the moment, the Warri refinery is inactive. This is different from the 2017 contract awarded to Saipem Contracting Nigeria Limited for the Tech Plant Survey of the Warri and Kaduna Refineries at 2,025,000.32 euros.
“Disturbed that the Kaduna Refinery and Petrochemical Company (KRPC) has, over the past 10 years, absorbed N2,266,248,434.00 in the name of rehabilitation, yet the refinery remains unproductive. Nigerian National Petroleum Company Limited (NNPCL) approved a $741 million renovation deal with Daewoo Engineering and Construction Limited to renovate Kaduna Refinery in February 2023. It is intended to restore the refinery to produce 110,000 barrels of gasoline per day (at least 60 per cent capacity) by early 2024.
“We are worried that if a thorough investigation of the past and current rehabilitation projects is not undertaken by the Senate, the cycle of awarding unproductive Turn Around Maintenance contracts may not abate, thereby retaining the status quo where rehabilitation contracts have become conduits for siphoning public funds, while Nigerian citizens continue to suffer due to the high cost of petroleum products. This is happening as the world moves towards green and clean energy sources.”
The lawmakers, in their individual contributions, declared that the four refineries have remained a drain on public funds.
Senator Adams Oshiomhole said the Senate must ensure proper oversight functions to ensure that Nigerians enjoy value for their taxes.
“We need to unravel why the refineries that were working before suddenly became moribund. The Senate will do justice to ensure that those behind it account for how much they have paid out and what they have done so far. The amount spent on the refineries so far could have been used to build brand new ones. Senators must take these issues seriously.”
Senator Adamu Aliero attributed the poor performance of the refineries to sabotage by players in the downstream sector.
He said, “This is the most important motion taken by the 10th Senate. Despite the huge sums spent on TAM, the refineries remained moribund.
The sabotage is deliberate because they don’t want the refineries to work so that they can continue to import petroleum products into the country. The Senate had conducted investigations and discovered that N3 trillion had been spent on subsidies.”
Deputy Senate President Jibrin Barau, who presided at the Tuesday plenary, said that those who had misappropriated funds meant for the TAM should be brought to book.
Other committees to work with the Senator Jibrin-led ad hoc committee include the committees on Petroleum Resources Downstream, Upstream, Gas, Finance, Appropriation, and Public Accounts.
They are to submit their report within four weeks.
YOU SHOULD NOT MISS THESE HEADLINES FROM NIGERIAN TRIBUNE
Nigeria’s current situation lamentable — Anyaoku
Chief Emeka Anyaoku, a former Secretary-General of the Commonwealth has described the current situation in…
Bukola Saraki foundation covers Mr Ibu’s medical bills
The Abubakar Bukola Saraki Foundation has fully covered the medical expenses of the…
Hold my pastor responsible if anything happens to me — Chef Dammy
Ekiti-based Nigerian chef, Damilola Adeparusi, popularly known as Chef Dammy, has stated that her…
Why Tiwa Savage may not sing for more than a year
In a move reminiscent of Afrobeat sensation Tekno, renowned Nigerian singer Tiwa Savage is facing the prospect of…
How Gomba won 2023 Nigeria Prize for Literature
THE 2023 edition of The Nigeria Prize for Literature climaxed last Friday at Eko Hotel, Victoria Island, Lagos, with…
Kidney failure, also known as end-stage renal disease (ESRD), can have various causes, but the two main types are...
and then