FG responsible for fuel subsidy payment — NNPC
ABUJA—Nigerian National Petroleum Corporation, NNPC, yesterday, disclosed that it was the Federal Government that is paying subsidy on petrol and not the corporation. The NNPC also stated that it spent $396.33 million on Turn Around Maintenance, TAM, for the country’s four refineries between 1998 and 2008. Addressing the House of Representatives’ Ad-hoc Committee investigating the status of the nation’s four refineries, Chief Operating Officer in charge of Refineries, Mr. Anibor Kragha, who represented the NNPC, said it was the Federal Government that is responsible for subsidy payment and not the corporation However, in the TAM record sent to the committee, chaired by Mohammed Datti (APC-Kaduna), the NNPC did not include the cost of the TAM carried out during the last administration. In the breakdown of the expenses, NNPC stated that of total sum of $182.730 million proposed for old and new Port Harcourt refineries, $157.641 million was spent, while $151.170 million was spent on Warri refinery. The NNPC further noted that of the $91.5 million proposed for the Kaduna Refinery, $87.517 million was spent. As a result of this, President of the Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, Mr Olabode Johnson, proposed two models of refinery management to end the perennial challenges facing the four refineries. Stressing that the four refineries were “running on a faulty business model,” Johnson argued that solving the TAM is a short-term solution, thus the need to have a holistic solution that is long-term and sustainable.” According to Johnson, some of the challenges bedeviling the refineries include: lack of operational autonomy, unnecessary bureaucracy, unsteady crude oil supply, delay in evacuation of refined products leading to shut down of refineries as well as ageing manpower leading to knowledge gap. Johnson, who was represented by Timothy Jayeoba, member of PENGASSAN Central Board, stressed the need for adoption of public private partnership (PPP) as well as NNPC’s financing model up to 10 years. On the status of the four refineries, Johnson who quoted the NNPC’s data, said the average functional utilisation of the refineries as at 2017 was 20 per cent. He also proposed government ownership of 100 per cent equity alongside private sector handling the operation and maintenance. He recommended the adoption of functional models operational in South Korea, Cote d’Ivoire, South Africa, Indonesia.