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Experts believe time is ripe for NNPC sale


THUR, FEBRUARY 14 2019-theG&BJournal-Broken government promises, multibillion naira poured into turn around maintenance (TAM) and a key state-owned institution soaked in failure and corruption: it has been decades of disgraceful stories for the Nigerian National Petroleum Corporation (NNPC). The refineries and the huge amounts budgeted for its  (TAM) is the paradox that haunts the nation.

The call for NNPC’s disposal has mounted again against the back-drop of oil’s dwindled contribution to nation’s Gross Domestic Product (GDP) in 2018, a mere 8.6% contribution to aggregate real GDP and the dysfunctional state of the refineries it runs.

The NNPC itself has admitted severally that none of the refineries worked up to 50% of its capacity. The four refineries have an installed capacity for 445,000 barrels per day. Recent NNPC data confirm that the Kaduna refinery has altogether stopped production- (0.0%) capacity utilised. Data also show that the Warri refinery utilised only about 12.8% capacity in April 2018 while the Portharcourt refinery did about 10.7% capacity.

In 2018, the NNPC imported a total of 15.874 million metric tonnes of petrol despite its ownership of the four refineries. The Group Managing Director Maikanti Baru in January 2019, trying to suppress disgust on the huge TAM investment, told newsmen that the refineries had not undergone TAM for an aggregate of 42 years, a claim dismissed by industry watchers as a ‘’fat lie.’’

In February 2018, the House of Representative ad-hoc Committee forced the suspension of a ‘blurred’ $1.8 billion TAM contract for the four refineries. The Committee queried the viability of continuing investment of public funds in the refineries.

‘’We now have a window of opportunity to dispose of these burden not just because they are no longer functioning but because they have become a huge economic nuisance to the nation and these issues point to the need to dispose of the corporation’’ said one source familiar with NNPC.

Previous calls for sale of the corporation were resisted especially by the Labour Unions whose fears were driven by the acrimonious outcome of the sale of the power company, Power Holding Company of Nigeria (PHCN) and on the suspicion that such sales often ended up in the hands of cronies who contemptuously strip the assets.

‘’But our refineries has fallen into deep crises, where production is none existence and investments has experienced a crash,’’ a source said. ‘’So why hang on to a wasteful venture? he queried.

Analysts agree that the best way to make the nations four refineries function properly again would be for the federal government to prepare acceptable sale options and quickly sell to the private sector players who have the reputation and experience in running the business of refineries.

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