It’s a sad situation Nigeria can’t refine its oil – Kachikwu

Nigeria’s Minister of State for Petroleum Resources, Ibe Kachikwu, has bemoaned the country’s inability to refine its own crude oil despite four decades of operations in the downstream sector.

Kachikwu made this statement before the senate committee on petroleum on Thursday, noting that the ministry he presides over and the Nigerian National Petroleum Corporation (NNPC) were working actively to provide lasting solutions to the current fuel crisis in the country.

Kachikwu, however, noted that Nigeria’s refineries need to be functional in order for fuel crises to be resolved totally.

“In what I might call an emergency before the work that we are doing on the refineries that would be finished sometime in 2019,” Kachikwu said.

“I want to remind that over two years we haven’t had queues. We are spending night and day to find solutions to nip this in the bud.

“Ultimately what this country needs is to have its refineries working and I have said that it is shameful that after 30, 40 years of activities in the downstream, cannot produce sufficient [petroleum products]. I have said nobody sells crude in its form in the world and we have to have the technical capacity to do this.”

The minister also listed non-payment to marketers as one of the reasons for the scarcity. Kachikwu expressed regrets that some people took advantage of the situation.


NNPC reduces petrol imports by 45 percent

The Nigerian National Petroleum Corporation says it has achieved a 45 percent reduction in the quantity of petrol imported into the country.

Dr. Ibe Kachikwu, Minister of State for Petroleum Resources, said in a message he posted on his Facebook page on Saturday, that imports of Premium Motor Spirit was down from 95 percent to 50 percent.

The minister credited the petrol price modulation mechanism introduced by the government last May as the reason for the reduction in imports, which he says has triggered investments into the downstream sector of the oil industry. He noted that marketers have begun importation of PMS as a result of the development.

“First we’ve moved from a fully subsidy based sector to a partially liberalised sector. I say partially because we haven’t quite achieved the template to have a fully liberalised sector. What that has done for us is that it has reduced consumption from 50 million litres to 37 million litres a day.

“Some of that figures are fraud-based, others are potential diversion numbers, but what is happening now is that the effect of our response curbed the appetite for consumption and left us with a much more robust reserve.

“In addition, the pricing governance, which was a modulating concept, enabled us to come closer to what the realities of pricing were and so this enabled marketers to jump back into the business and continue to massively import.

“So what you find over a period of between when we introduced this measure (in May 2016) till towards the end of last year, was that the NNPC reduced its importation profile from supplying about 90 to 95 per cent of the market to about 50 per cent, which was massive, providing jobs, activity, investment and stability.”

The minister also said in his message that the federal government had stopped paying subsidy to oil marketers, noting that there were still some challenges in the downstream sector in spite of this.

“There isn’t fuel scarcity, we are not short of products, but yet the downstream and midstream sectors continue to remain challenged. And what we are going to do is to analyse what we have done so far and begin to throw solutions to some of these challenges.

“When we first moved in, we had refineries that were not producing, fuel subsidy issues of almost N15bn monthly expenses, massive diversion of petroleum products across borders. We are consuming about 50 million litres of products at the time, but that substantially has reduced now.

“We had issues of pricing efficiency and governance, for at that time the prices we were selling at were so ridiculously below what the sustainable prices are. And you find a situation where basically marketers disappeared from the industry. So we had massive shortages, queues and everything seemed to be breaking down. We’ve since come out from that.”

The minister also said that the time has come for Nigerians to start looking towards using alternative and cleaner sources of energy instead of fossil fuel.

“The reality is that all over the world everybody is moving to cleaner fossils. LPG provides that for us, gas does the same for us. So we need to begin to look at how we can install pipelines for LPG and take it to places of its consumption, where we can have vehicles that have the capability to potentially use gas in order to reduce PMS usage.”

Four top NNPC officials asked to resign

Four top officials of the Nigerian National Petroleum Corporation (NNPC) are to leave the organisation after management requested they tender their resignation.

In a report published in PREMIUM TIMES, Esther Nnamdi-Ogbue, Managing Director of NNPC Retail; Mamza Gwadabe, General Manager (Operations) of NNPC Retail, Ibrahim Bello, another personnel in NNPC retail and a fourth person whose identity has not yet been confirmed, have all been asked to resign from the organisation.

All four persons have been held accountable for a ‘missing petrol’ scandal involving Capital Oil & Gas Nigeria Limited. The product, over a 100 million litres of petrol valued at over N14 billion, belonging to NNPC Retail, was stored at private depots under a throughput arrangement between the corporation and private entities to build strategic national fuel reserve. The product was, however, discovered to be missing in January when the Petroleum Products Marketing Company (PPMC) needed to access the NNPC Retail’s petrol stored at the Capital Oil depot.

Mr. Henry Ikem-Obi, NNPC Chief Operating Officer of its downstream operations, said that management of Capital Oil provided neither explanation nor account of why and how the stock petrol was sold without permission from NNPC Retail.

The committee set up to investigate the scandal found that the four persons were complicit and consequently recommended their dismissal from service.

Latter reports suggest, however, that the Minister of State for Petroleum Resources, Ibe Kachikwu, and the management of NNPC have suggested that their dismissal be converted to retirement.

A source said that despite the calls for her resignation, Mrs. Nnamdi-Ogbue has said that she will not resign as she has not done anything to warrant leaving the organisation. It was also said that she insists that Mr. Gwadabe will not resign, vouching for his ability to carry on with his responsibilities in the organisation.

“I have also heard the rumour, but I have not been served any official letter. I know I have done nothing wrong to deserve any such action. I will continue to do my work until the person who appointed says something,” Mrs. Nnamdi-Ogbue said.