Olusola Bello
The Nigeria National Petroleum Corporation (NNPC ) Limited losses N264 billion annually because of the dilapidating states of the refineries, depots, and Pipelines across the country.
This situation has made it imperative for the government to quicken the move to remove subsidy 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 the company has been losing N132 billion annually because the refineries are not functioning, and further break down of the losses indicates that every month the company loses N11billion.
As regards the depots and pipeline it is the same, as N132 is lost annually and N11 billion every month.
These losses are 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.
The losses would not have happened if the facilities are private sector driven according to industry operators, because there would be proper maintenance of the facilities, had the government had the political will to allow the private sector to run them.
if the depots and pipelines are put into use fuels could get to all the nooks and crannies of the country within hours, rather than trucking the fuels
This would have reduced the carnage on our roads they stated. The nonfunctioning of the refineries and pipelines have made the cost and volume of petrol used in the country questionable.
A former official of the NNPC who spoke on the need for the subsidy to be removed and free the downstream sector of the petroleum industry said 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.
He also advocates for a clear regulatory environment that should govern the downstream sector so that there would not be confusion on how the subsector is operating
“There is 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 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.
Other stakeholders at a workshop that was organized for Energy Reporters by oil marketers wondered why the petroleum product template in Nigeria is not working and it is working in South Africa where it was borrowed from. “The template in South Africa contributes about 33 percent of the government revenue but in Nigeria, it is contributing nothing.”
According to them, the regulations are meant to help the people to realize the dynamism of the products they are dealing with.
They further stated that unless the nation’s refineries that are currently undergoing rehabilitation are able to attain between 60 to 80 percent capacity utilization, Nigeria would still be importing fuel.
About 2000 truck moves fuel across the country every day with its attendant consequences on road infrastructure.
