$10bn waste: Reps demand NNPCL to outsource management of local refineries

The House of Representatives has advised the Nigerian National Petroleum Company Limited (NNPCL), to consider outsourcing management of the country’s refineries after repairs.

The report disclosed that Nigeria spent more than $10 billion in a decade on three oil refineries that produced hardly any fuel.

It cost the NNPCL N4.8 trillion ($10.3 billion) to run the facilities from 2010  to 2020, even though they were operating far below their combined capacity of 445,000 barrels of crude per day, according to a report by a Committee in the House of Representatives. The company is currently rehabilitating the plants.

By the time they were put into rehabilitation, they had almost ceased to function and output had not exceeded 30 per cent since 2010, according to the report.

That left Nigeria entirely reliant on products imports, whose price was kept artificially low by fuel subsidies.

The decades-long subsidy regime was scrapped by President Bola Tinubu last week and the government has been working to address the refining challenges to temper fuel prices.

A giant 650,000-barrels-per-day facility built by Aliko Dangote, commissioned last month, but it’s unclear when it will be able to supply a significant quantity of refined fuel to the domestic market.

The NNPCL, is also rehabilitating its 210,000-barrel-per-day complex in Port Harcourt and in Warri through contracts worth more than $2 billion with Italy’s Maire Tecnimont SpA and South Korea’s Daewoo Engineering & Construction Co. Ltd. respectively. Both sites are expected to resume operations before the end of 2023, according to the report which HoR approved on Tuesday.

The report advised the NNPCL to consider outsourcing the management of the repaired refineries to “reputable” international firms.