The House of Representatives on Monday, 7th of May, 2018 rejected the submission of the Nigerian National Petroleum Corporation on the fresh bid to carry out a Turnaround Maintenance (TAM) on the country’s four refineries. A budget of $1.8Bn is already set aside for the TAM. This came as the Central Bank of Nigeria disclosed that between 2013 and 2017, the country spent $36.3Bn on the importation of petroleum products. The country’s total import bill for the period was $119.4Bn.
The Apex Bank made the submission to an ad hoc committee of the House, which is investigating the planned TAM of the refineries. The committee rejected the NNPC’s submission on the grounds that it was sketchy and did not answer the questions it sought answers to. The committee, which is chaired by a member of the All Progressives Congress from Kaduna State, Mr. Garba Datti-Muhammad, started a public hearing on the controversial TAM in Abuja on Monday,7th of May 2018.
The committee demanded detailed information on the spending on the four refineries, particularly on all previous TAM and other repairs, as a basis to justify the fresh $1.8Bn plan. It gave the NNPC 24 hours to provide the information. This came as the NNPC’s Chief Operating Officer, Refineries and Petrochemicals, Mr. Anibor Kragha, disputed the committee’s position that over $20Bn had been spent on TAM since the inception of the refineries by successive Governments.
He argued that if the combined cost of building all the refineries was less than $2Bn, there was no way the series of TAM done over time would be up to $20Bn. “The figure you have is not true. It is strange how the committee arrived at the $20bn,” Kragha stated. But, when he was asked to give the accurate figure spent on each of the refineries for maintenance, Kragha could not. Rather, he informed the lawmakers that the NNPC’s new agenda was not to do a TAM but to carry out a comprehensive rehabilitation of the four refineries.
He claimed that the last time TAM was done on any of the plant was in 2004, adding that the level of delay would require a comprehensive rehabilitation of the plants and not TAM. Kragha’s disclosure left the members confused, as they grilled him on the difference between TAM and a comprehensive rehabilitation. Datti-Muhammad said, “The NNPC treats us with contempt and fails to respond to inquiries adequately.
“In our letter to you, we gave you a template on how to provide the information we asked for. But, you gave us a sketchy document, carefully avoiding the real information.” Another member of the committee, who is the Chairman, House Committee on Public Accounts, Mr. Kingsley Chinda, asked the NNPC to provide the details requested by the committee, whatever name it was called.
“What is important here is the cost of the planned repairs. Is it TAM or comprehensive rehabilitation? What is the cost? Tell us,” Chinda added. The committee later sent Kragha away, directing him to submit full details of the planned work on the refineries today (Tuesday, 8th of May, 2018).
In his submission to the committee on the economic implications of maintaining the refineries, the CBN’s Director of Research, Mr. Ganiyu Amao, told the lawmakers that the country continually depended on fuel importation to service domestic needs because the plants rarely work efficiently. He stated that the country had to deplete its foreign reserves to pay TAM bills.
Amao stated, “Data from the CBN show that from 2013 to 2017, a total of foreign exchange committed to imports in the country stood at $119.409bn, while the total foreign exchange committed to imports in the oil sector stood at $36.371bn, representing 13.5 per cent of all imports made by the country. “It greatly exerts serious pressure on our external reserves and depreciates the value of our local currency.”
However, lawmakers said the CBN’s submission still did not directly address the cost implications of the TAM done on the refineries over time, aside from acknowledging that it was a drain on the Nation’s economy. A member of the committee, Mr. Razak Atunwa, said, “The CBN, like the NNPC, has not told the committee anything useful in respect of TAM.
The committee directed the CBN, just like it did to the NNPC, to furnish members with information on the TAM today (Tuesday, 8th of May, 2018). The country’s refineries, which are located two in Port Harcourt and one each in Kaduna and Warri, have largely been unable to refine crude for domestic consumption and possible exportation of finished products.