FG pumps N100bn into refineries despite not refining single drop of fuel

The Nigerian National Petroleum Corporation (NNPC) says between January and December 2021, a total of N100 billion was spent on the rehabilitation of Nigeria’s refineries despite not producing a single drop of refined petroleum products.

NNPC is the sole importer of petrol into Nigeria and the corporation manages the country’s refineries in Kaduna, Port Harcourt and Warri.

According to the NNPC in 2021, no petrol had been produced by the refineries for about 13 months running.

The oil firm had over the years adopted the scheme to ensure petrol imports into Nigeria, being the sole importer of the commodity, while other marketers had avoided PMS imports due to inaccessibility of the dollar

Providing a breakdown on refineries rehabilitation cost, NNPC noted that N8.33 billion was committed monthly but failed to provide a detailed breakdown of how the money was spent.

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NNPC currently has four idle refineries, two in Port Harcourt (PHRC), and one each in Kaduna (KRPC) and Warri (WRPC).

The Federal Government has been making moves to get the country’s refineries back on stream, as Nigeria currently imports bulk of its refined petroleum products.

Following the suspension on the removal of fuel subsidy, Timipre Sylva, the Minister of State for Petroleum Resources promised that Port Harcourt refinery would be in operation before the end of 2020.

This promise he noted was in fulfilment of the contract reached with Tecnimont SPA, an Italian company to rehabilitate Port Harcourt refinery for $1.5 billion.

The contract stipulates that the rehabilitation work will be in three phases, 18, 24 and 44 months.

Meanwhile, the NNPC has announced it spent a whopping N270.83 billion on subsidy payment in the month of December 2021.

This is a 967.35 percent increase when compared to N25.37 billion committed for the same payment in February.

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The December figure was the highest paid by NNPC in a single month and the exact amount it submitted to the Federal Executive council.

You will recall the NNPC submitted a N3 trillion subsidy payments budget to FEC, for which state governors and legislators demanded an explanation.

Oil price has been on the rise and this has become a huge burden for NNPC and pain to states which depend on FAAC remittance.

The subsidy payment increased to N60.3 billion in March, and N61.9 billion 126.2 billion were paid in April and May respectively.

The payments continued in June as it jumped to N164.33 billion before dropping to N103.28 billion in the month of July.

August, September, October and November NNPC reported N173.1 billion, N149.2 billion, N163.7 billion and N131.4 billion respectively.

December payment of N270.83 billion represented a month on month increase of 106.1 percent.

PDP in reaction to NNPC subsidy payments claim demanded full disclosure of specifics of the subsidy templates including details of the cost of importation of petroleum products.