NNPC Denies Bankrolling Fuel Subsidy Regime


• House c’ttee queries ENI’s inclusion in consortium for refinery rehab
• President approved firms, says NNPC
James Emejo in Abuja

The Nigerian Nigerian Petroleum Corporation (NNPC) on Tuesday refuted suggestions that it is currently bankrolling the fuel subsidy regime which has been subject of controversy between the executive and legislature.

The pricing template made available to lawmakers by the Petroleum Products Pricing Regulatory Agency (PPPRA) had indicated that the landing cost for petrol is between N160/N170 per litre while the official price remains N145 per litre.

But the administration of President Muhammadu Buhari has continued to deny payment of fuel subsidy to marketers, to the amazement of parliament, which said there was no appropriation for subsidy payments in the 2017 budget- meaning that if the government is actually paying subsidy, that could be in breach of the constitution as every public monies spent by the executive must be appropriated.

As a result, the House of Representatives, had passed a resolution setting up an adhoc committee to get to the root of the matter.

Meanwhile, at the continuation of the two-day public hearing on the investigation on the status of the nation’s four refineries, their TAM to date and regular modular licensed refineries by the House ad hoc committee, chaired by Hon. Garba Datti Muhammad (APC, Kaduna), the NNPC’s Chief Operating Officer (Refinery Downstream), Mr.  Anibo Craker was asked if the corporation funded the fuel subsidy payments.

The COO responded that, “NNPC does not pay subsidy.”
Muhammad, further inquired to know if the government does the payment.
But Craker, sensing the bait, side-stepped the questioned and maintained that NNPC doesn’t pay subsidy.
The chairman had wondered why NNPC had been unable to effect turn around maintenance on the nation’s refineries but could have money to pay fuel subsidy which runs into trillions of naira.

The committee, also picked holes in NNPC’s engagement of an Italian energy firm, ENI in the consortium for the rehabilitation of the country’s refineries.
A member of the committee, Hon. Razaq Atunwa (APC, Kwara) had pointed out that ENI, which had been accused in Italy for grand corruption with integrity issues, ought not to be part of a consortium engaged for both the old and new Port Harcourt refineries.

But the NNPC’s COO said due process was followed in the engagement of all companies.
He said Buhari actually approved the engagement of the consortia.
He said NNPC’s selection was focused on finding financiers who are consortium who had financing and technical expertise including marketing and logistics prowess.

Craker said the current plan is for comprehensive rehabilitation of all the refineries because “We’ve not consistently maintained the assets which are deteriorating.”
He said it made more sense to rehabilitate existing refineries rather than build new because of the cost implications.

However, the committee chairman ruled that NNPC should provide it with audited accounts of the four refineries for a five-year period including their budgets as well as documents on contractors engaged and their method of selection as well as evidence compliance with Public Procurement Act with one week.

He also demanded for Certificate of Completion from companies which had carried out TAM on the refineries.
Meanwhile, a representative of the Petroleum and Natural Gas Workers Senior Staff Association (PENGASSAN), Mr. Timothy Jaiyeoba, in his submission said NNPC was adopting a faulty model in the operation of the refineries.

He said TAM would not solve the current problem but rather, the use of two-refinery model.
He said:”The modus operandi needs to change. The problem is inadequate maintenance as and when due and not the age of refinery.”