Reps panel: Rehabilitation of Nigeria’s refineries gulped N11.34trn in 10 years

The house of representatives ad hoc committee on the state of refineries in Nigeria says the federal government has spent a total of N11.34 trillion on the rehabilitation of the country’s refineries from 2010 to 2020.

Presenting a report to the lower chamber on Tuesday, the committee said the nation’s three refineries, located in Warri, Port Harcourt, and Kaduna,  have been moribund since 2010.

According to the committee, the cost of revamping the refineries was derived from four components: the cost of operations and running refineries, the cost of rehabilitation projects, subsidy payments, and deductions from the federation account for rehabilitation.

Giving a breakdown, the committee said the cost of rehabilitation projects totalled N42.64 billion in the period under review; deductions from the federation account for rehabilitation was N191.67 billion; and losses by refineries over the given period amounted to N336.52 billion.

According to the committee, subsidy payments (2010 to 2020) totalled N5.94 trillion and the total cost of running refineries gulped N4.80 trillion.

Cumulatively, the committee said the total actual cost of rehabilitation in the 10-year period was N11.34 trillion.

The panel also said other additional actual costs of rehabilitation were funded in foreign currencies to “the tune of $592.976 million, €4.877 million, and £3.455 million”.

“After due considerations and analysis of the data before the committee, the total actual cost of rehabilitating the Nigerian refineries may be put at eleven trillion, three hundred and forty-nine billion, five hundred and eighty-three million, one hundred and eighty-six thousand, three hundred and thirteen naira, forty kobo only (₦11,349,583,186,313.40),” the report reads.

“These costs were gotten from four subheads such as; cost of operations and running refineries, cost of rehabilitation projects, subsidy payments, and deductions from the federation account for rehabilitation.”

The committee also made some recommendations for further legislative action.

They proposed that continuous legislative oversight of the ongoing rehabilitation works at the Port Harcourt and Warri refineries be ensured, in order to achieve results.

The panel also suggested that the NNPC should ensure the immediate “award of contract” for the rehabilitation of the Kaduna refinery.

“The NNPC should take full advantage of the Petroleum Industry Act of 2021 passed by the national assembly to fast-track the rehabilitation programme of the refineries empowered by the deregulated business environment and ensure that the refineries are restored to a maximum 90 percent nameplate utilisation,” the committee said.

“The federal government should ensure the activation of all the 37 non-active licences approved and issued to certain private refineries for maximum operations or such licences be revoked.

“That the NNPC pays the outstanding sum of €202,500.03 as the balance for the outstanding payments due to SAIPEM Nigeria Limited on the contract for the technical plant survey of Warri and Kaduna refineries as the job was concluded and fully reported.”