President Bola Tinubu has assured Nigerians that the country’s government-owned refineries will return to operation, but stressed that restarting the facilities would mean little if they failed to generate profits and deliver sustainable value.
Gatekeepers News reports that Tinubu gave the assurance yesterday in Abuja during a meeting with the leadership of the Nigerian Union of Petroleum and Natural Gas Workers (NUPENG), where he acknowledged concerns over the performance of the Port Harcourt, Warri and Kaduna refineries.
The president said his administration was undertaking a “firm reset and structural reworking” of the economics surrounding the refineries to ensure they become productive and economically viable.
“The refineries you mentioned are going to come back to work. We are just building a very firm reset and structural reworking of the economics of it,” Tinubu said.
He added: “Ordinary flame and smoke of a refinery doesn’t mean that it is working until it is profitable and yields the value for which it was built.”
Tinubu said he had accepted responsibility for the assets and liabilities inherited by his administration, insisting that his priority was to make the facilities work for the benefit of Nigerians.
“I’m not a man who will go looking back at everything because I have accepted the assets and liabilities of my predecessors. No matter what has happened in the years past, it is my responsibility now as the president to fix it, make it work for the largest common value of our population,” he said.
The assurance comes amid renewed efforts by the Nigerian National Petroleum Company Limited (NNPCL) to restructure the rehabilitation of the refineries.
In May, NNPCL signed a Memorandum of Understanding with Sanjiang Chemical Company Limited and Xingcheng (Fuzhou) Industrial Park Operation and Management Co. Ltd. to facilitate the rehabilitation, restart and expansion of the Port Harcourt and Warri refineries through a technical equity partnership model.
The latest initiative follows years of government spending on refinery rehabilitation projects that failed to translate into sustained production.
Under the administration of former President Muhammadu Buhari, about $2.9 billion was approved for the rehabilitation of the country’s three refineries. Despite the huge expenditure, the facilities barely produced refined petroleum products before being shut down again.
The development has raised fresh questions about the economic viability of the government-owned refineries and the effectiveness of previous rehabilitation efforts.
Earlier this week, the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) said the government-owned refineries were shut down because they were losing money, rather than because they were incapable of operating.
PENGASSAN President, Festus Osifo, told journalists in Lagos that the rehabilitation of the three refineries represented one of the most significant interventions in the facilities in recent years.
However, he criticised years of government announcements and approvals which, according to him, were not matched by corresponding work on the ground.
Tinubu’s latest comments appear to signal a shift in focus from simply restarting the refineries to restructuring their operations and ensuring they can generate sustainable returns.
Finance Ministry Faults NNPCL, NUPRC Over NEITI Audit Queries
Meanwhile, the Federal Ministry of Finance has accused the NNPCL and other government agencies of failing to provide financial records needed to address queries raised in the Nigeria Extractive Industries Transparency Initiative (NEITI) 2021–2023 Oil and Gas Industry Audit Report.
The ministry’s Permanent Secretary, Raymond Omachi, disclosed this yesterday when he appeared before the Senate Committee on Public Accounts to respond to financial queries contained in the NEITI report.
Omachi said the ministry had been unable to provide satisfactory explanations for some of the issues because it was not directly involved in the transactions and had experienced difficulties obtaining the relevant records from agencies, particularly the NNPCL and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
One of the major issues raised by NEITI concerns a $3 billion pre-export financing facility secured in 2012 to settle petroleum subsidy payments.
According to the audit report, questions remain over the recovery of the loan from monthly federation revenue proceeds under the Pre-Export Financing and Project Eagle agreements.
Another major query relates to $722.6 million in dividends and interest paid by Nigeria LNG Limited (NLNG) to the then Nigerian National Petroleum Corporation (NNPC) in 2021.
NEITI said the funds, which belonged to the federation, were neither remitted to the Federation Account nor properly accounted for.
The audit report also questioned the expenditure of about N200 billion on the rehabilitation of Nigeria’s refineries, noting that none of the facilities was operational in 2021 despite the substantial expenditure.
The ministry was also unable to satisfactorily explain $221.283 million in overhead costs incurred by the National Petroleum Investment Management Services (NAPIMS) during the same year.
Responding to the queries, Omachi said the ministry could not provide complete explanations for transactions handled by other agencies.
“We don’t have direct involvement in all the issues raised, and the required financial records from the affected agencies, particularly NNPCL, NUPRC, etc., are not there,” he said.
He disclosed that the ministry had engaged Arthur Andersen LLP to conduct a forensic audit of the transactions and reconcile outstanding financial records.
However, members of the committee questioned the ministry over repeated extensions granted for the completion of the forensic audit.
The committee, chaired by Senator Ibrahim Hassan Dankwambo (Gombe North), asked the permanent secretary to state when the audit report would be ready, following reports that the deadline had already been extended twice—from six months to one year.
Omachi assured the lawmakers that the ministry was prepared to cooperate with the committee, but urged the Senate to compel the NNPCL and NUPRC to appear alongside the ministry to enable the outstanding issues to be addressed jointly.
