Why Nigeria’s Refineries Are Not Working-PENGASSAN

The Petroleum and Natural Gas Senior Staff Association of Nigeria has faulted the operating model of the Nigeria’s refineries, stating that such projects are better run using a Public-Private Partnership model.

The President of PENGASSAN, Festus Osifo speaking during an interview on Channels TV noted that the nation’s refineries have not operated optimally because they were being run by the government.

He added that involving the private sector in its operation going forward is critical to ensuring that the refineries operate optimally.

He said, “These refineries are not working today because they were being run by the government, refineries built in other parts of the world at around the same time as ours are still working today.

“The private sector runs refineries around the world, and if we allow them to run it, we won’t find ourselves in this sorry state again.

“So what we advocate is that after rehabilitating the refineries, we will bring in the private sector, in ratio 51:49 to the private sector and the government depending on the agreed arrangement.”

The Group Managing Director, Nigerian National Petroleum Corporation, Mele Kyari had admited that the operation of the refineries had been below installed capacity.

The NNPC GMD had noted that it had been impossible for the refineries to run at the 90 per cent capacity as expected.

He said, “Every refinery is expected to operate at least 90 per cent of installed capacity, it was impossible to run these refineries before the shut-down at that level. We tried running at 60 per cent of the installed capacity but it will lead to value destruction, where you take $100 crude to the refinery and bring out only $70.

“All the four refineries in the country are shut down due to difficulties in feeding them with crude oil via the pipelines that have been completely compromised by vandals.”

He said the Corporation was moving rapidly to execute complete rehabilitation of the refineries under an exercise that would guarantee restoration of the facilities to at least 90 per cent capacity utilization.

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