Minister of Petroleum, Dizeani Alison Madueke
Chika Amanze-Nwachuku in Lagos and Dele Ogbodo
The Federal Government is to spend not less than $1.6 billion for the turnaround maintenance (TAM) of its three refineries located in Port Harcourt, Warri and Kaduna, Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, said Monday.
Alison-Madueke, who appeared before the Senate Committee on Petroleum Resources Downstream Sector in Abuja, told the members that it is only after the TAM that the three refineries could operate at full capacity utilisation. The TAM, which is expected to begin in January 2013, is scheduled for completion in October 2014.
THISDAY checks revealed that while the Port Harcourt refinery has not been in operation, both the Warri and Kaduna refineries as at July, have been operating at about 25 per cent capacity utilisation.
The minister, while fielding questions from the committee Chairman, Senator Magnus Abe, on the lingering fuel scarcity and distortion in the official prices of the products, explained that for strategic reasons, the timetable for the maintenance had to be revised.
However, as part of efforts to address the fuel scarcity, the Petroleum Products Pricing Regulatory Agency (PPPRA) has issued permits to 39 Oil Marketing and Trading (OM&T) companies for importation of petrol for the fourth quarter.
Alison-Madueke added that under the new timetable for the maintenance of the refineries, work would commence in January 2013, first with the Port Harcourt refinery, which has not undergone any major repair since 2000, followed by the repair of the Warri and Kaduna refineries respectively.
According to her, over 75 per cent of the parts needed for the TAM on the Port Harcourt refinery has arrived the country, adding that $32 million had been paid to the original builder of the refinery as part of the efforts to revive it.
However, she pointed out that the total amount that would be expended on the Port Harcourt refinery is $147 million, while the modernisation of the refinery alone would cost the government $406 million.
Alison-Madueke attributed the constant shortage of petroleum products across the country to the wilful vandalism of oil pipelines by illegal bunkerers.
She called on stakeholders such as state governments and security agents to help in the fight against pipeline vandalisation.
On the distortion in the pump price of petrol in the wake of the current fuel scarcity, she said the resort to trucks to transport petroleum products from PPPMC depots has not helped the situation.
On the immediate solution to the intermittent shortage of the products across the country, the minister said that government was collaborating with security agents to check pipeline vandalism.
Earlier, Abe had told the minister that the committee had travelled round the country and found that in many places visited, petrol and kerosene were sold far above the official prices of N97 per litre and N50 per litre respectively.
He expressed worry about the state of the three refineries, adding that there is an urgent need to transform them to modern refineries using the latest technology in the sector to enhance their efficiency.
He also criticised the Nigerian National Petroleum Corporation (NNPC) discriminatory attitude towards independent oil marketers.
He said: “I want to let you know that independent marketers are going through hell in their attempts to load fuel at the depots even though there is evidence that they have paid for these products.
“You are the head of that ministry and it is your duty to supervise the agencies and put proper checks in place so that there will be sanity.”
Towards checking the lingering fuel scarcity, the PPPRA has given permits to 39 oil marketers to import petrol between September and December.
Sources confirmed Monday that the beneficiaries were contacted last Friday to pick up their allocation documents.
The PPPRA, it was also learnt, is to retain the same level of imports as in the third quarter, estimated at 3.12 million metric tonnes, an equivalent of 4.2 billion litres of petrol.
The companies that got approval for the third quarter import included: NNPC, Acorn Petroleum Ltd, Aiteo Energy, Ascon Oil, Avidor Oil and Gas, A-Z Petroleum, Bovas, Capital Oil and Ind. Ltd, Conoil Plc, Dee Jones Petroleum and Gas, Eterna Plc and Folawiyo Energy Ltd.
Others are: Oando Plc, Obat Petroleum. Ltd, Ontario Oil & Gas Ltd, Sahara Energy Ltd, Rain Oil Ltd, Rahamaniyya Oil Gas, Shorelink Oil Ltd, Spog Petrochemicals Ltd, Swift Oil Ltd, Techno Oil Ltd and Total Nig Plc.
Other beneficiaries are Forte Oil Plc, Fresh Synergy Ltd, Heyden Petroleum, Honeywell Oil & Gas Ltd, Ibafon Oil Ltd, Integrated Oil & Gas Ltd, IPMAN Refining and Marketing Ltd, LUBCON Oil & Gas, Master Energy Ltd, Matrix Energy Ltd, Mobil Oil Plc, MRS Oil & Gas Ltd, MRS Oil Nig. Plc, NIPCO Plc and Northwest Petroleum & Gas Ltd.
The agency had reduced the number of companies that participated in the fuel importation to 39 in the third quarter, from the 42 in the first and second quarters of the year, to check corruption that has characterised the fuel import scheme.
In the first quarter, the 42 oil depot and facility owners were issued permit to import a total of 3.755 million metric tonnes of petrol or 5.036 billion litres.
However, the volume was slashed to 3.575 million metric tonnes or equivalent of 4.794 billion litres in the second quarter, reflecting a drop of 180,000 metric tonnes or 241.38 million litres.