NNPC to hand over refineries to private firm

The Nigerian National Petroleum Corporation (NNPC) has said the country’s four refineries will be handed over to private firm to manage on operations and maintenance basis.

Group Managing Director of NNPC, Mele Kyari, who said this in an interview said the refineries are being rehabilitated and would be handed over after the revamp.

The country has bee importing petroleum products despite boasting of four refineries in Warri, Kaduna and Port Harcourt as the assets have over the years performed below par leaving the nation in a huge deficit.

“We are going to get an O&M contract, NNPC won’t run it,” Kyari said. “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 disclosed that the country would use the model that was deployed for NLNG, adding that private investors are needed to invest in the assets.

Kyari stated that the model, which is totally different from previous approach, would guarantee the desired outcome for the refineries.

He also said 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,” Kyari said.

The removal of subsidy, Kyari said, 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.