Kachikwu: Lack of PIB costs Nigeria N3trn yearly

Ibe Kachikwu, a ministerial nominee and group managing director of the Nigerian National Petroleum Corporation (NNPC), has revealed that Nigeria is losing in excess of N3trillion annually to lack of Petroleum Industry Bill (PIB).

“The investment that we are losing on an annual basis because of the lack of PIB, is in excess of $15b (N3tr) a year, and the reason is simple,” he said while addressing the senate on Wednesday.

“It would have been better that you didn’t start at all, then announce very flamboyantly that you were going to do PIB then step back from it, because it increases the level of uncertainty that no international investor wants to grapple with.

“So I would urge this very revered senate to very quickly come to terms and find a way of working with us, to go ahead and pass those elements of PIB where there is no much contention.”

He allayed fears of scarcity, reiterating that Nigeria has refined fuel to last the country for 40 to 50 days to say the least, with no plans to reduce PMS pump price.

“Refineries today are operating at about 25, 27 percent capacity. I know there have been numbers bandied about with performance level of 65 percent. That’s not true and I have advised His Excellency as such.

“When I joined, the first thing I did was to put a clarion call to all the managers of the refineries, and I said the success of your job depends on these refineries and how you work.

“If we can’t run them, then we need to get out, make adequate arrangement, privatise them and take them out.

“Whenever you don’t run a refinery well, every barrel of crude that is sent into that refinery produces less. Today, if you send a $52 crude, you produce an income of about $15 to $20. So from point one, you’re already losing money.”

He however added that the Port Harcourt refinery is producing at 67 percent capacity.

“Our intent is to grow Port Harcourt to about 70, 75 percent by the end of the year,” he said.

“Both Warri and Kaduna are shut. We just finished repairs on the pipelines, we would begin pumping crude into Kaduna refinery tomorrow (Thursday) and over the next four five days, they would get the stock that they need to get the plant kicking.”

He argued that any refinery that “produces below 60 percent is no production, because the reality is that the performing capacity of refineries worldwide are in the 90 percent and above categories. That’s when you begin to make yields that turn into a profitable refinery.”

He urged the country to let go of disgraceful importation of crude, which it has in excess, adding that the price of importation is exorbitant.

“It’s not only disgraceful that a country that has so much resources to be able to produce its own product where neighbouring countries like Ghana and Chad are beginning to run their own refineries and produce their own product, but it’s also the fact that the cost of imported products are exorbitant.”