Senate Constitutes Panel to Probe NNPCL Over N11.35tn Spent on Moribund Refineries in 13 Years

The Senate, yesterday, constituted an ad-hoc committee to investigate the Nigerian National Petroleum Company Limited (NNPCL) over the N11.35 trillion spent on the Turn Around Maintenance (TAM) of the country’s four moribund refineries, without result, in the last 13 years.

That was as the upper chamber justified the purchase of 360 sport utility vehicles (SUVs) for its members. But it was silent on the actual cost of each vehicle, explaining that the senators preferred the imported SUVs to the locally manufactured ones.

Deputy President of the Senate, Jibrin Barau, announced the composition of the panel to investigate NNPCL’s TAM while presiding over plenary.

The decision was taken after the red chamber deliberated extensively on a motion by Senator Sunday Karimi, the senator for Kogi West.

Karimi’s motion was on the urgent need to investigate the various TAM projects of Nigerian refineries in order to uncover waste and forestall further waste of scarce public resources.

The red chamber asked the ad hoc committee to investigate all contracts awarded for the rehabilitation of all state-owned refineries It also asked the panel to ascertain progress on the ongoing works in all refineries in order to forestall waste and corruption.

The committee was also expected to interrogate the Federal Ministry of Petroleum Resources, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), NNPCL, and the Bureau of Public Enterprises on the best approach to commercialising and ensuring profitability of the state-owned refineries

The senate mandated the panel to invite the NNPCL, NUPRC and the Nigerian Liquefied Natural Gas to explain the country’s preparation for green energy sources in line with the Paris Agreement on Climate Change

The ad hoc committee was asked to conduct the investigation in conjunction with the Senate Committee on Petroleum Resources (Downstream).

The deputy senate president said those who had taken money meant for the TAM should be brought to book. He named Senator Isah Jibrin as chairman of the panel to work with chairmen of the committees on Petroleum Resources (Downstream); Upstream; Gas; Finance; Appropriation, and Public Accounts, and submit a report within four weeks.

Karimi, while moving his motion, said state-owned refineries in Nigeria had been a serious drain pipe of public finance, depriving the citizens of the joy of being an oil producing nation.

He said, “Between 2010 to date, Nigeria is estimated to have spent N11.35 trillion (N11, 349, 583, 186, 313.40) excluding other cost in other currencies, which include $592, 976, 050.00 dollar, €4, 877, 068.47 and £3, 455, 656.93, on renovation of refineries, yet they are unproductive.

“The Federal Government of Nigeria has spent over N6 trillion between 2010 and 2023, on fuel subsidy due to Nigeria’s low refining capacity and has spent almost twice the amount on rehabilitating (TAM) projects on its refineries in Port Harcourt, Kaduna and Warri between 2010 and 2022.

“Despite the moribund state of the four refineries, the operating costs of the refineries between 2010 and 2020 is estimated at N4.8 trillion.

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

Karimi explained, “The Federal Government of Nigeria has carried out rehabilitation projects in Port Harcourt Refinery Company (PHRC) over a period of seven years from 2013-2019 at an estimated cost of N12, 161, 237, 811.61 only.

“In addition, on the 18th March 2021, a rehabilitation contract was executed between NNPC/PHRC and Tenenimont SPA at a lump sum of $1, 397, 000, 000.00 only (about N75 billion amidst global public criticism.

“The Phase 1 of the project is expected to be completed in 28 months after the contract, Phase 2 within 24 months, and Phase 3 within 44 months of execution. Despite this, the Port Harcourt Refinery remains a money pit. Going by projections and representations from NNPCL, the renovation works ought to be completed and operations of the refinery commenced by June 2023.

“In a bid to revitalise the Warri Refinery, the federal government has injected huge public funds into revamping Warri Refinery & Petrochemical Company Limited to the tune of over N28, 219, 110, 067.10 between 2014 and 2019.”

He added, “That particularly, around the 24 June 2022, the Federal Executive Council awarded Maintenance Services for Quick Fix Repairs of Warri Refinery to Daewoo Engineering and Construction Limited at $497, 328, 500.00, yet at the moment the Warri Refinery is inactive.

“This is different from the 2017 contract award to Saipem Contracting Nigeria Limited for Tech Plant Survey of the Warri and Kaduna Refineries at 2, 025, 000.32 Euros.

“The Kaduna Refinery and Petro-Chemical Company (KRPC) has over the past 10 years gulped N2, 266, 248, 434.00 in the name of rehabilitation, yet the Refinery remains unproductive.

“The NNPCL approved a $741 million renovation deal with Daewoo Engineering and Construction Limited to renovate Kaduna Refinery in February 2023 and it is intended to restore the refinery to production of 110,000 barrels of petrol per day (at least 60 per cent capacity) by early 2024.

“If a thorough investigation of the past and current rehabilitation project is not undertaken by the Senate, the circle of awarding unproductive turn around maintenance contracts may not abate, thereby retaining the status quo where rehabilitation contracts have become conduit pipes for siphoning pubic funds, whilst Nigerian citizens continue groaning over the high cost of petroleum products due to the moribund situation of the state-owned refineries, even as the world gravitates towards green/clean energy sources.”

In their various contributions, senators condemned those who ripped the nation of its scarce resources and vowed to bring them to book.

Meanwhile, the Senate, yesterday, justified the purchase of 360 SUVs for its members. The red chamber was, however, silent on the actual cost of each vehicle but explained that the members preferred the imported SUVs to the local ones.

The Socio-Economic Rights And Accountability Project (SERAP) had asked the Federal High Court in Lagos to stop the lawmakers from taking delivery of SUVs pending the hearing and determination of the applications for injunction filed by the organisation.

The group’s applications for interim and interlocutory injunction followed reports that the House of Representatives members were set to procure and take delivery of SUVs valued at N57.6 billion.

According to reports, each of the SUVs would cost taxpayers at least N160 million.

Reacting to the development at a news conference, Chairman, Committee on Senate Services, Karimi, wondered why Nigerians were not talking about the ministers who rode about four official vehicles.

He said, “Somebody that is a minister has more than three land cruisers, Prado and other vehicles and you are not asking them! Questions, why us?

“These vehicles that you see, go to Nigeria roads today, If I go home once, my senatorial district, I come back spending a lot on my vehicles because our roads are bad.

“I said the decision that we took on using land cruiser is the cost and durability.

“Before they came up with this. It is not the decisions of the senators alone; we did an analysis before arriving at land cruisers. It was based on comparative analysis of cost of technical issues and durability on Nigeria roads.

“We want something that we can maintain for another four years and the issue of buying vehicles for National Assembly, you know it is a reoccurring issue, it occurs every assembly, it will always come up.

Karimi said the analysis centered on cost, durability and recommendations made by the procurement office of the National Assembly was adopted by the senators

Senator Karimi argued that the the national assembly is not operating in isolation, adding that the recently confirmed ministers ride in same vehicles, and multiple convoys .

He called on Nigerians to beam their searchlight on Ministers, state Assembly lawmakers and government appointees

Karimi, wondered why Nigerians were not talking about the Ministers who ride about four official vehicles but only concentrate on National Assembly members

He says, Ministers have more than three land cruisers, Prado and other vehicles , yet Nigerians are not asking them questions

“If you go to state Houses of Assembly today, check out, most of them before they were even inaugurated, the governor would have bought vehicles waiting for them, even local government chairmen.

“I drove the vehicle my local government chairman uses, so why National Assembly?”

Justifying the high cost of the vehicles, Karimi said it was because the National Assembly owed the suppliers about N16 billion.

He said, “The cost, let me tell you, you know I am the chairman, senate service. When I came into the Senate, when they gave me their liability, they have a liability of over N16 billion that is made up of different vehicles of 7th Assembly, 8th and 9th Assembly.

“If you are a business man and you supply vehicles for somebody in 2014 or 2015 or so and up till now they owed you.

“I am not trying to defend anybody, if you see them selling land cruiser in the market, let’s say it is A cost, you don’t expect somebody that will supply it to supply it at the price they are selling it in the market.

“It has to leave a margin and the civil service, for supply, they allowed for 25 per cent margin plus that and VAT and I think that VAT is 7.5.

“Out of that 25 per cent margin they will still remove five per cent tax from it.

“You are telling someone to supply and he may even not end up making payment for three years and you want him to supply at the price they are selling in the market, it is not possible.”