House to Conduct Investigative Hearing on NNPC’s Decision to Shut down Warri Refinery

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By Adedayo Akinwale

The House of Representatives has resolved to conduct an investigative hearing on the decision of the Nigerian National Petroleum Corporation (NNPC) to shut down operations at the Warri Refining and Petrochemical Company.

The resolution of the House followed the adoption of a motion moved by Hon. Ben Igbakpa, at plenary on Wednesday.

Moving the motion, the lawmaker said Warri refinery was mandated to produce refined products from mainly local crude.

He said the three main sections of the production department — reforming, crude distillation and catalytic cracking units — have operated for the past eight years due to the efforts of its personnel.

Igbakpa noted that the plants were operating at an output of around 115m3/hour, which translates to about 68 per cent installed capacity, adding that products that were being supplied from the refinery included petrol, gas oil, diesel, Kerosene, Low Pour Fuel Oil (LPFO) for Ships and Industrial Fuel.

The lawmaker said: “The refinery has not operated optimally due to alleged top management decisions of the Nigerian National Petroleum Corporation (NNPC) to ground the plant for personal benefit from marketers importing products that can be produced in the refinery.”

Igbakpa expressed concern that the plant had severally shut down due to haulage challenges, neglect in the evacuation of products, lack of functional or operational storage tanks and poor maintenance culture on the part of management which also constitutes another reason for the refinery’s non-functionality.

He added: “Aware of the alleged plan to ground the plant from refining products by members of the top echelon of the Warri Refinery in collaboration with the Chief Operating Officer (COO) as well as diverting crude meant for refining.”

The lawmaker stressed that when crude oil is delivered from Escravous tank farm for refining, the products are hoarded for about 14 days and thereafter diverted through the refinery jetty to interested buyers or specific companies they have special interests in who pay less.

Igbakpa noted that the resultant effects of this perceived economic sabotage is that the plant is brought down because no crude to refine as it has been diverted.

He said when it became apparent that the management of Warri refinery have abandoned their responsibility of maintaining the plant, the staff of the refinery on several occasions contributed their monies to buy materials and tools to fix faulty equipment.

Igbakpa noted that most of the spherical tanks used for storage of Liquefied Petroleum Gas (LPG) have been leased out to Kwale Hydrocarbon Nigeria Limited (KHNL), a private company, while other storage tanks are being leased out to private interests all in a bid to ensure that the Warri Refining and Petrochemical Company remains shut down indefinitely, even when the said refinery has the production capacity of 75 per cent.

The lawmaker said with the federal government officially confirming the return of fuel subsidy, as the Petroleum Products Pricing Regulatory Agency (PPPRA) had on 11 March, 2021 fixed the pump price of petrol at N212.61 per litre for March, which the Minister of State for Petroleum Resources and NNPC have denied, yet petroleum marketers sell between N175 – N200 depending on the location.

He said the increase was due to the shutdown of local refineries and creation of cost elements of the commodity, which the PPPRA analysed as comprising addition to the ex-coastal price of average lightering expenses, Nigerian Maritime Administration (NIMASA) charges, jetty throughput charges, storage charge and average financing costs with the inclusion of retailers’ margin, which has brought the pump price of the commodity to 212.61 per litre.

Igbakpa pointed out that all that was required was routine maintenance to further improve the operating capacity of the refinery which the local manpower was very capable of providing and have demonstrated same overtime to make the price of petrol affordable.

He added that the commencement of local production will help to mitigate the incessant and upward price adjustment of the petroleum products, ameliorate the hardship and inflation that comes with such exercise to Nigeria and Nigerians.

The House mandated “the Committee on Petroleum (Upstream and Downstream) to conduct an investigative hearing on the failure, refusal or neglect of the NNPC to address the haulage challenges vis-à-vis inadequate storage tanks affecting the Warri refinery to forestall the frequent shutting down of the refinery and report back in four weeks”.