Kerosene Scarcity: NNPC Blames Marketers

The Kaduna Refining and Petrochemical Company limited (KRPC), a subsidiary of the Nigerian National Petroleum Corporation (NNPC) has raised alarm that diversion, hoarding and illegal movement of kerosene to unapproved destinations are the causes of scarcity and high cost of the product in the country.

Manager public affairs of Kaduna refinery, Abdullahi Idris made the complaint at the flagging off of sale of kerosene at N50 per litre official pump price to the host communities in Chikun local government area of Kaduna state.

Giving reasons for the lingering scarcity and outrageous cost of kerosene in the country, Idris said the Kaduna refinery loads not less than 60 trucks of the product to marketers on daily basis and wondered why the product is not made available to the masses by marketers.

He said the sale of kerosene to the host communities at official pump price of N50 per litre was to cushion the effects of the scarcity and also appealed to independent marketers in the country to stop hoarding or diverting the product.

FG To Rehabilitate Kaduna, Port Harcourt, Warri Refineries

As part of measures to reposition the nation’s refineries for optimal performance, the federal government has concluded plans for total rehabilitation of the Port Harcourt, Warri and Kaduna Refineries.

The Public Affairs Manager of the Kaduna Refining and Petrochemical Company (KRPC), Mr. Ibrahim Idris, disclosed to Channels Television in Kaduna, adding that the complete overhaul will be handled by the original companies that built the refineries.

He said the rehabilitation of the Kaduna Refinery will be handled by Chiyoda Corporation, a Japanese company.

The Port Harcourt refinery will be the first to undergo rehabilitation which is expected to commence by June this year. The overhaul according to the refinery official will be done in phases.

Meanwhile, Mr. Idris has assured passengers travelling for the Easter holiday of adequate supply of petrol.

He, therefore, advised the public not to engage in any panic buying of fuel as the refinery has enough PMS to serve states in the North during and after the celebration.

Jonathan sets March 2013 deadline for complete rehabilitation of all refineries – Abati

President Goodluck Jonathan has set the next four months as deadline for all the nation’s refineries to operate at their optimum capacity.

Special Adviser to the President on Media and Publicity, Dr Reuben Abati, who disclosed this to state House correspondents on Thursday, announced that “the President has set March, 2013 deadline for the completion of the Turn Around Maintenance (TAM) and complete rehabilitation of three refineries in Kaduna, Port Harcourt and Warri.”

Dr Abati made this known after a meeting in the president’s office which had in attendance, the Minister of Petroleum Resources with her team including the Group Managing Director of the NNPC and other directors in the oil and gas sector, who made series of presentations.

The crux of the meeting according to the president’s aide was the state of the nation’s refineries and what steps can be taken to improve the capacities of these refineries to make them perform at their optimum.

He also revealed that the President is set for the full implementation of the task force reports, beginning with the committee on the nation’s refineries in order to boost domestic refining of crude oil products to create jobs.

It would be recalled that the committee on the Refineries which was headed by Dr Kalu Idika Kalu blamed the epileptic performance of the country’s refineries on lack of proper maintenance and funding.

Stop importation of fuel

Speaking on the reports Dr Abati said “the president has not only commended the committee on refineries, but he also made it clear that as part of the determination of his administration to make sure that Nigeria stops the importation of fuel and he subsequently directed the Minister of Petroleum Resources to take that report and look into it and then come up with action plan as to what can be done going forward.”

Dr Abati also revealed that the President demanded for a technical report to be prepared on how to get the refineries working.

Giving a break down on the present capacities of the three refineries, the President’s spokesman stated that “what the Kaduna refinery is able to produce per day now is about 110,000 barrels per day, the Port Harcourt refineries 210,000 barrel per day and the Warri refineries 125,000 barrel per day.”

Outlining the three points the president wants tackled, the presidential spokesman said the president told the team that the interest of this government is to ensure that crude oil is refined domestically and the administration’s determination to put an end to the importation of finished petroleum products because “you can refine domestically and at the same time still import because if you don’t have enough you will bridge it.”

He also expressed the president’s desire to create jobs locally in the sector because “the president’s conviction is that if you keep importing refined products, you are creating jobs for other people in other economies.

The meeting agreed to take care of the turnaround maintenance of the refineries in the immediate term and the target is that this short term intervention will be completed by March, 2013 and if that is done, that will raise the capacities of these refineries taken together to sixty five per cent.”

“But the determination is even to go beyond that to also engage in the rehabilitation of the refineries. There is a turnaround maintenance and also plan for rehabilitation” he declared.

Implementing committees report

According to Dr Abati, contrary to believe by some people that government sets up committees then refuse to implement the recommendations of such committees, “President Jonathan has already commenced the implementation of the recommendations of the committees he set up” he stated.

“The whole point of this is to make it clear that action is already being taken on the reports of the committees. The first meeting that was held today is on this issue of refineries. What I have given you is the outline. Another meeting will be fixed where further presentations would be made on the technical details on how these objectives would be achieved.”

“I think this clarification is important because since the presentation of these reports to Mr President, there has been an excessive focus on the politicisation of the Petroleum revenue task force reports whereas on that day, there were discussions relating to the refineries, there were discussions relating to the issues of governance system in the petroleum sector.”

“It is important to clarify that actually action is already being taken and for the benefit of those who think when committees submit reports, government sleeps on those reports, you can see clearly that this is not the case”

Petroleum minister says maintenance of refineries will cost N250 billion

The Federal Government plans to spend N250 billion on the Turn-Around Maintenance of the Port Harcourt, Warri and Kaduna refineries.

The Minister of Petroleum Resources, Diezani Aliso-Madueke

This was disclosed by the Minister of Petroleum Resources Diezani Alison-Madueke on Monday while being grilled by the Senate Committee on Petroleum Resources (Downstream) over the failure of the government to fix the refineries.

The minister said the beginning of the fourth quarter of 2014, the Turn-Around Maintenance project would have been completed, and the three refineries would be producing 370, 000 barrels per day, which is about 90 percent of the 445,000 barrels needed daily.

The project would start with the Port Harcourt refinery and Mrs Alison-Madueke said the government will spend $146 million out of which $32million (75 percent) had already been paid for the materials needed.

On why petroleum is selling at varying prices across the nation, the minister merely said: “Since the price was changes in January, it has become difficult for the market forces to stabilise at the official price. There is a major issue of supply partly due to subsidy payments. We are battling hard to ensure sufficient supply.”

Asked if the Department of Petroleum Resources (DPR) was helpless at checking the disparity in prices, she replied: “If you are covering a country as large, there will be issue of pricing”.

“The DPR is, however, moving aggressively in the last months to check the anomaly. Of recent, 75 filling stations have been sealed up across the country over disparity in pricing”, Alison-Madueke told the committee.

She informed the committee that the vandalisation of NNPC pipelines in Arepo, Ogun State was a major reason responsible for the recent fuel scarcity in some parts of the country and especially in the South West.

She noted that in the process of repairing the damaged pipelines, three NNPC officials were kidnapped, confirming that the three officials had been killed.

But the committee said petroleum was selling at varying prices because that the minister was allocating the product to the independent marketers with preferential treatment.

The chairman of the committee, Magnus Abe, said: “How can filling stations sell at N97 per litre when the PPMC, as we have discovered, collected money from marketers without supplying them the product on time. Honourable minister, have you ever gone to the depots to see what marketers go through. We were told that you are giving allocation to only those who have godfathers. Unless this anomaly is removed from the source, we can’t force filling stations to sell at official prices.”

The committee also asked the minister to “digitalize” the process of allocating the products to enhance transparency, saying the “current analogue process is creating hidden costs”.

PENGASSAN faults sack of NNPC Group Managing Director

The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) on Wednesday faulted the sack of the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Austen Oniwon along with his management team saying that this move will delay the growth of the oil and gas industry.

The former Group Managing Director of NNPC

In a press statement signed by PENGASSAN’s President, Babatunde Ogun, the Union said that incessant changes in the management leadership of the NNPC will affect the on-going reforms policy in the industry.

According to the statement, one of the policy thrusts in the on-going NNPC transformation that is likely to suffer setback is the ongoing Turn Around Maintenance (TAM) and repair of the four refineries intended to put them back on stream to operate at their installed capacity.

Mr Ogun said that in the past few months, “the NNPC management had been working assiduously on how to bring back the refineries and there has been results to this effect, as the Kaduna Refineries and Port Harcourt Refineries have started working progressively towards their installed capacities, while there are plans to put back the Warri Refinery.”

The union leader expressed fear that the new management may abandon the ongoing TAM and repairs of the refineries, and thereby allow the government to sell those refineries as scraps.

The statement also said that “other vital areas where the outgoing team would have been of tremendous value is in the actualization of well articulated visions of a globally competitive national oil company in which their wealth of experience is to be tapped in kick-starting the impending Petroleum Industry law to successful take off.”

While congratulating the new management team led by the new Group Managing Director, Andrew Yakubu, the PENGASSAN president urged the team to follow the laid down reform policies and plans of the outgoing team; adding that the new team will be held accountable for any policy that truncate the growth of the oil and gas industry.

Mr Ogun said that the incessant change in the management leadership of the NNPC will affect the investment drive in the oil and gas sector, saying that “no investor will want to put money in a sector that the government can wake up in one day and just decide to change the drivers of the reforms and policies that can grow such sector.”

He said that one of the requests of the union in various engagements it had with the government is that “the appointment and disengagement of the Group Managing Director (GMD) should be standardized and tailored over tenureship like other government agencies and parastatals.

“Without prejudice, we are against the process of appointment and removal of NNPC Group Managing Director because it has always drawn the industry backward. It does not engender continuity of development policies, as each of the appointed GMDs comes with their governance style and discontinue previous administration’s growth policies.

“In our various engagements with the government, we demanded that the appointment of the GMD should be based on tenure just as we have it in the Central Bank of Nigeria (CBN), Nigerian Communications Commission (NCC) and Bureau for Public Enterprises (BPE), among others, should be put in the PIB.”

The Union leader said that in the last 10 years, the national oil corporation had six GMDs from Jackson Gaius-Obaseki to Austen Oniwon, while the CBN and the NCC have had two each with the same period, adding that this brings serious challenges of uncertainty and instability in such major appointments, in a volatile and strategic industry like the oil and gas.

While decisions have been taken and new drivers of the Corporation appointed, he said the government must address our concerns which we believe will go a long way in helping the growth of the oil and gas industry.

Jonathan meets with refinery operators


President Goodluck Jonathan on Tuesday, held a meeting with refinery operators and technical managers of the three refineries in Kaduna, Port Harcourt and Warri in an effort towards bringing a full turn around to the refineries.

The meeting which took place at the Presidential villa is  following a  two day retreat convened by the Minister of Petroleum resources and is designed to find solution towards tackling the challenges that led to the inability of the refineries to operate at full capacity

Briefing state house correspondents after the meeting the Minister of Petroleum Resources, Mrs. Deziani Alison Madueke said that the challenges in the Nigerian refineries are still prevalent but that the retreat was designed to encapsulate the challenges that they saw and put the solutions across the board.

According to the Minister, plans for the new Green Field refineries billed for Lagos, Bayelsa and Kogi states, which are envisaged to add 750,000 barrels per day of extra refining capacity to Nigeria’s current 445,000 barrel per day capacity, is still on course. And she emphasized that the government will only be playing a very minimal-participatory role in the building of the refineries.

She says besides this move, the sector is being thrown open to capable investors and the federal government participation in the running of the new refineries will be minimal to allow better efficiency

The Minister condemned the incessant vandalisation of oil pipelines, which claims is still prevalent in the country, as well as the outdated equipment and lack of training. She noted that a strategic frame work will soon be fashioned out to bring a turn around to the refineries.

In a separate event, the Kalu Idika Kalu led task force on refineries was inaugurated with a 60 working days timeline to complete its mandate of unraveling the issues bedeviling local refining.