Former Chief Operating Officer (COO), Upstream of the Nigerian National Petroleum Corporation (NNPC), Bello Rabiu, has revealed that the hemorrhaging of the Federal Government’s assets, including the refineries and about 5,000 kilometers of pipelines, depots, and pipelines across the country, cost the country about N264 billion in one year.
He made this known while speaking at a workshop organized by the Major Oil Marketers Association of Nigeria (MOMAN) in Lagos yesterday.
Despite the injection of funds meant to ensure that the refineries reduce the amount spent on imported petroleum products, they have continued to sink further as pipelines have failed to deliver products to the Nigerian National Petroleum Company (NNPC) Limited depots across the country.
This situation has made it imperative for the government to quicken the move to remove subsidies on fuel and hands-off from the business of fuel supply in the country and allow the private sector to drive the business. This is the only way this financial waste can be stopped.
A breakdown of this figure indicates that NNPC was losing about N132 billion to malfunctioning refineries annually, and N11 billion to it monthly.
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The depots and pipeline are no different, as N132 billion is equally being lost to both annually and N11 billion monthly.
These losses are said to be incurred through the payment of salaries of workers in these idle facilities and the maintenance of the facilities and other sundry expenses that are being incurred.
According to Rabiu, who spoke on the need for the removal of subsidy and free the downstream sector of the petroleum industry, “there is too much waste in the system and that the government should allow the forces of demand-supply to be fully operational in the sector.”
While advocating for a clear regulatory environment to govern the downstream sector to avoid confusion on how the subsector is operating, Rabiu noted that there was a need for a clear regulatory environment to make the downstream function well.
“Marketers should be able to buy the product at a price convenient and also sell at a price that is good for them without government interference.”
He likewise bemoaned the present situation where there is no template by the Nigerian Midstream and Downstream Regulatory Authority, saying that it is not good for the industry and the business environment.
He said as the government prepares for subsidy removal in the next 18 months, it should put in place proper and articulated policies that would aid the smooth operations of the downstream sector of the petroleum sector.
