Senate probes N11.35 trillion spent on turnaround maintenance of refineries

The Senate has tasked its ad hoc committee to investigate all contracts awarded for rehabilitating all state-owned refineries from 2010 to 2023.

This followed the adoption of a motion on “Urgent need to investigate various turnaround maintenance projects of Nigerian refineries, to uncover waste and forestall further waste of scarce public resources, by Senator Karimi Sunday ( APC- Kogi) at plenary on Tuesday.

Presenting the motion, Mr Sunday said from 2010 to date, Nigeria was estimated to have spent N11.35 trillion on renovating refineries, yet unproductive.

Mr Sunday said the federal government had spent over N6 trillion between 2010 and 2020 on fuel subsidies due to Nigeria’s low refining capacity and had spent almost twice the amount on rehabilitating and turnaround maintenance projects on its refineries in Port Harcourt, Kaduna and Warri between 2010 and 2022.

He said that despite the moribund condition of the four refineries, the operating costs of the refineries between 2010 and 2020 were N4.8 trillion.

“The refineries are estimated to make a cumulative loss of N1.64 trillion within four years.

“Concerned that the federal government of Nigeria has carried out rehabilitation projects in Port Harcourt Refinery Company (PHRC) over a period of seven years from 2013 to 2019,” Mr Sunday stated.

He said the project’s first phase was expected to be completed in 28 months after the contract, while phase II was to be completed in 24 months and phase III in 44 months of execution.

The senator, however, said the Port Harcourt refinery, as of October 24, remained a money pit.

He said that according to projections and representations from NNPCL, the renovation should be completed, and the refinery operations should commence by June 2023.

Mr Sunday also said it was disturbing that the Kaduna refinery and Petrochemical Company (KRPC) had, over the past 10 years, gulped N2.266 billion in the name of rehabilitation, yet it remained unproductive.

“The Nigerian National Petroleum Company Limited (NNPCL) approved a renovation deal with Daewoo Engineering and Construction Limited to renovate Kaduna refinery in February 2023.

” And it is intended to restore the refinery to the production of 110,000 barrels of petrol per day, at least 60 per cent capacity by early 2024,” he said.

Senator Isa Jibril (APC-Kogi), who seconded the motion, said it was worrisome that N4.8 trillion was spent on operating costs when the refineries were not functional.

Senator Adams Oshiomhole(APC- Edo) said the Senate must ensure proper oversight functions to ensure Nigerians enjoy value for their tax.

Senator Adamu Aliero alleged that the moribund nature of the refineries was a deliberate sabotage by some persons who wanted to continue petroleum products importation into the country.

The Senate urged the committee to ascertain progress on ongoing works in all refineries to forestall waste and corruption.

It also urged the committee to interrogate the Ministry of Petroleum Resources, the NUPRC, NNPCL, and BPE on the best approach to commercialising or ensuring the profitability of the state-owned refineries.

It urged the committee to invite the NNPCL, NUPRC and LNG to explain the nation’s preparation for green energy sources in line with the Paris Agreement on climate change.

Deputy Senate President Barau Jubrin, who presided over plenary, said those found to have taken resources meant for the functioning of refineries should be brought to book.

He thereafter named Senator Isah Jibrin (APC -Kogi) as the committee chairman.

The committee was to present its report in four weeks.


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