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NNPC may find it hard to explain spending fresh $1.8bn on refineries

There are emerging indications that the Nigerian National Petroleum Corporation (NNPC) may find it hard to explain before the aggrieved members of the House of Representatives, the viability of further expenditure on the country’s four refineries when their combined daily allocation of 445,000 barrels of crude is not improving after much has been spent on them.

The query seems to be coming on the heels of fresh request by NNPC to spend $1.8bn on the Turn Around Maintenance of the refineries located in Port Harcourt, Kaduna and Warri.

According to the lawmakers, the refineries had already gulped more than $20bn on TAM in a short time without appreciable improvement in performance to justify the fresh expenditure.

The conclusion of the lawmakers seems to suggest that Nigeria’s refineries had the worst performance record in Africa at 11 per cent, compared to the 81 per cent scored by Egypt and 85 per cent recorded by South Africa.

In a swift motion by a member from Ogun State, Mr. Ibrahim Isiaka, described the performance of the refineries as abysmal and very annoying to the collective intelligence of Nigerians.

In his submission, he recalled that “The House is cognisant that sums of $308m, $57m, $200m, and lately, more than N264bn were spent, yet it was reported that the NNPC is seeking $1.8bn to carry out another TAM to make the refineries attractive to investors”.

Before now, several efforts by the Federal Government to bring private investors on board to build new refineries had also not been successful.

However, Isiaka argued that “Despite major paradigm shift and consideration of different reliefs, including reduction of licensing fee for new refineries from $1m to $50,000 to make domestic refining attractive and reduce huge capital flight to fuel importation, only Aliko Dangote has put the licence to use.

“No efforts have been made to revoke the licences given to individuals and corporate organisations to build refineries, which have yet to be utilized,” Isiaka noted.

Though the Deputy Speaker, Mr. Yussuff Lasun, resolved to determine the current health status of the four refineries by investigating the TAM carried out so far on them, NNPC is expected to prepare answers on why previous TAM cannot give commensurate results and the need for additional spending on the assets.