FG: $1.2bn required to fix refineries
NNPC operating secret fuel subsidy — Senate
Minister of State for Petroleum Resources, Dr Ibe Kachikwu yesterday said the Federal Government needs about $1.2 billion to repair and bring the three refineries in Port Harcourt, Warri and Kaduna to full capacity.
He also said the refineries have neither been concessioned nor disposed to any business concern.
The clarification by the minister came following speculations that government might have concessioned the Port Harcourt refinery to Italian oil firm Agip and local Nigerian oil group, Oando. A Senate panel has uncovered secret operation of subsidy regime by the Nigerian National Petroleum Corporation (NNPC), despite its cancellation by the present administration.
A ranking senator told our correspondent that the Senate Committee on Petroleum (Downstream) uncovered the development weeks ago and it has formerly written the corporation.
The discovery came a year after the Federal Government ended the subsidy regime, leading to increase in the pump price of petrol from N87 to N145
The Senate has asked the ministry to halt the process over perceived concerns that it lacked transparency.
But speaking at a press conference in Abuja after meeting senators on the matter, Kachikwu said no financiers have been selected to revamp the refineries as speculated.
He explained that the technical committee set up to undertake the review and selection process was yet to submit its report.
The minister said what had been accomplished by the committee was to come up with a holistic investment figure that would be per litre.
The senator, who did not want to be named said preliminary investigation into the secret operation of subsidy regime, has shown that the NNPC was culpable.
“The cost of landing of fuel per litre and associated cost is more than N145. The NNPC is secretly operating subsidy regime at the backdoor. A good pointer to this is that no marketer is importing the product following the cost.
“We have written the corporation demanding some documents. When we receive the documents, we will be able to know more enough to fix the three refineries, but not selected any firm yet.
“We have not reached there, so anybody who is saying contract has been given is doing so in error,” he said.
The minister also stated that there was a consensus within government that after the financiers have been selected the Original Refineries Builders (ORB) which are Saipem in Warri; JGC in Port Harcourt; and Chiyoda in Kaduna, would undertake the repairs considering that they have better knowledge of the refineries. about the violation of the government directive. I don’t want to go into details because it would jeopardize our investigation, “he said.
Chairman of the Senate Committee on Petroleum (Downstream), Senator Kabiru Marafa (APC, Zamfara) confirmed the operation of subsidy regime by the NNPC.
Speaking during a debate on National Roads Fund (NRF) Bill at plenary yesterday, he said the current N145 pump price was not realistic.
Meanwhile, the report of the Senate Committee on Works, chaired by Senator Kabiru Gaya (APC, Kano) on the National Roads Fund (Est. Etc) Bill (SB.218) was yesterday stepped down.
It was stepped down after Senator Gaya presented his report and explained that the N5 levy proposal was not going to be deducted from the N145.
He said there was allowance for the deduction in the current pump price, insisting that the N5 won’t lead to increase in the pump price.
In his remark, Deputy Senate President Ike Ekweremadu, who presided over the plenary said the Senate has no intention to increase the pump price of fuel.