Reps to audit funds spent on rehabilitation, repairs of refineries

Reps to audit funds spent on rehabilitation, repairs of refineries

Reps to audit funds spent on rehabilitation, repairs of refineries

The House of Representatives has resolved to carry out an investigative hearing as well as comprehensive audit of funds spent on rehabilitation, repairs and maintenance of Nigeria’s refineries.

This followed the adoption of motion of urgent public importance by Rep. Onfoik Luke (PDP-Akwa-Ibom) at plenary on Wednesday in Abuja. Moving the motion, Luke said that there was need to ensure transparency and accountability in the rehabilitation of the refineries.

He said that this was pursuant to the recent approval of 1.5 billion dollars (N575 billion), for the rehabilitation of the 32-year-old Port Harcourt refinery. He said that the rehabilitation will be completed in 44 months with a three components funding from Nigerian National Petroleum Corporation (NNPC), Internally Generated Revenue (IGR), budgetary allocations provisions and Afreximbank.

Luke expressed concern that NNPC had allegedly spent about 25 billion dollars in turnaround maintenance of the refineries in the past 25 years. According to him, this latest development is coming after promises by the current administration that government would no longer spend on the facility.

“Previous rehabilitations notwithstanding, the NNPC audit report last year revealed that three of the nation’s four refineries recorded N1.64 trillion cumulative losses in their 2014 to 2018 details. “In spite of them not processing any crude oil in June last year, the three refineries still cost the country N10.23 billion in expenses,” he said

Luke said that the three refineries processed no crude because of the rehabilitation work being carried out on them, adding that there was no associated crude plus freight cost for the three refineries since there was no production.

He said that there had been operational expenses amounting to ₦10.27 billion, stating that this resulted in an operating deficit of ₦10.23 billion by the refineries. He said that in July 2017, major structural construction began on Dangote 650,000 bpd refinery with partial refining capability likely in 2022.

He added that the same lag period that rehabilitation would be carried out on the 210,000 bpd Port Harcourt refinery. The House therefore mandated its Committee on Petroleum Resources Downstream to carry out an investigative hearing and conduct comprehensive audit of the nation’s refineries.

The House mandated the committee to examine the performance bond, assurance, warrantees and guarantees put in place for operating and maintaining the plants after commissioning. The House urged the committee to report back for further legislative action within six weeks.

Nigeria to Make Eurobond Call as FX Scarcity Deepens

It urged the Federal Government to grant license and provide incentives for the building and construction of modular refineries in the country.


Reps to audit funds spent on rehabilitation, repairs of refineries