Private Operators To Take Over Nigeria’s Refineries
…Plants to be taken over on O&M basis
The Nigerian National Petroleum Corporation (NNPC) has said that it will no longer be involved in the management and operations of the Nigeria’s refineries after they had been rehabilitated.
The new plan, upon completion of the ongoing rehabilitation exercise is that the services of a company would be procured to manage the plants on an operations and maintenance (O&M) basis.
The Group Managing Director of NNPC, Mallam Mele Kyari, who dropped the hint during an interview on a national television yesterday, said the Federal Government is currently shopping for an O&M contract for the refineries.
“We are going to get an O&M contract. NNPC won’t run it. We are going to get a firm that will guarantee that this plant would run for some time. We want to try a different model of getting this refinery to run. And we are going to apply this process for the running of the other two refineries”, he stated.
The plan, ultimately, is to get private partners to invest in the refineries and get them to run on the NLNG model where the shareholders would be free to decide the fate of the refineries going forward.
This model, which is totally different from previous approach would guarantee the desired outcome for the refineries, the NNPC boss reasoned.
He said also that the decision to finally end the fuel subsidy regime is in the interest of ordinary Nigerians as it would free up funds for the various tiers of government to develop basic infrastructure in the education, health, transport, and other sectors for their benefit.
“Subsidy is elitist because it is the elites that benefit from it. They are the ones that have SUVs, four, five cars in their garages.
“The masses should be the ones to benefit. There are many things wrong with the under-recovery because it makes us to supply more than is needed. This makes the under-recovery to be bloated because we unwittingly subsidize fuel for the whole of West Africa. That has to stop,” the NNPC boss submitted.
He explained that the removal of subsidy would automatically correct the distortions it created in the market such as products arbitrage and smuggling, stressing that it would also provide the needed impetus for the NNPC to establish retail outlets in neighbouring countries.
On the agitation in some quarters for a reduction in the price of kerosene, he said the corporation’s focus was rather on how to migrate all those who were still using kerosene for domestic cooking to the use of Liquefied Petroleum Gas (LPG) which is popularly referred to as cooking gas.
According to him, apart from LPG being a cheaper fuel than kerosene, it is also safer and more environment-friendly. He said the Minister of State for Petroleum Resources, Chief Timipre Sylva was championing policies to deepen the adoption of LPG for domestic consumption, adding that widespread adoption of LPG usage was the best solution to kerosene supply challenges in the long term.