NNPC rules out sale of refineries

RefineryFROM the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr. Ibe Kachikwu, came yesterday a declaration that there is no plan by the Federal Government to privatise the nation’s refineries.

The NNPC boss also revealed that plans are underway to unbundle the Pipelines and Products Marketing Company (PPMC) into three different companies.

Meanwhile, the Chairman, Forte Oil Plc, Femi Otedola, has advised that the Federal Government should curb what he described as rising trend of selling
Household Kerosene (HHK) to airlines as substitute for Jet A1 fuel by some petroleum marketers.

Kachikwu, during an official tour of the Okrika Jetty and the Port Harcourt Refining Company Limited yesterday, stated that the PPMC would be split into a pipelines company that would focus primarily on maintenance of the over 5000 kilometers pipelines of the corporation, a storage company that would maintain all the over 23 depots, and a products marketing company that would market and sell petroleum products.

He informed that the move would ensure that the right set of skills is rightly positioned and the number of leakages in terms of pipelines breaks and products loss is reduced to the barest minimum.

The GMD noted that the ongoing phased rehabilitation of all the state-owned refineries would be accelerated with much vigour with the aim of reducing petroleum products importation into the country, adding that at full capacity, all the refineries could supply 20 million litres of premium motor spirit otherwise known as petrol on a daily basis.

Kachikwu affirmed that the refineries would not be sold but would be a joint venture with partners with established track records of success in refining, who would be invited to support the running of the refineries in order to ensure efficiency.

According to the GMD, efforts are in top gear to fix all the crude and petroleum products pipelines across the country. He stressed that the Nigerian Air Force would be engaged to provide aerial survey of the pipelines, the Nigerian Army Engineering corps to fix and police the pipelines while the Nigerian Navy will provide marine surveillance for the network of pipelines.

Kachikwu commended the NNPC’s engineers for the successful execution of the ongoing phased rehabilitation of the refineries, urging them to prepare a replacement programmes for obsolete spare parts of all the corporation’s installations in order to avoid intermittent shut down of facilities.

Speaking in a similar vein, the Managing Director of the PHRC, Dr. Bafred Audu Enjugu said the ongoing phased rehabilitation of the company cost a little less than $10 million, adding that the job was holistically carried out by indigenous engineers without any foreign support.

On her part, the Managing Director PPMC, Mrs. Esther Namdi-Ogbue, assured the GMD that the company would think outside of the box to provide solutions to all the challenges confronting the firm.

Otedola on aviation fuel
In a statement yesterday on the sale and use of household kerosene as aviation fuel, Otedola said: “This illicit act has been identified as a major factor contributing to the rising cost of Kerosene in the country and may also be the cause of some of the air mishaps we have encountered in the country in recent times.

“It is pertinent to state that HHK is sold by the Pipeline Products Marketing Company (PPMC) at the ex-depot and regulated price of N40.90k with the objective of selling to the average Nigerian at the pump price of N50.00k/litre.

“However, HHK which shares some physical and chemical properties with Jet A1 fuel (except for the storage and handling procedures to eliminate contamination in Jet A1 fuel) is being sold by some petroleum marketers to both local and international airlines at the international market price which may be as high as N140/litre. This huge arbitrage has led to evolution of some mushroom aviation fuel marketers who see this as an opportunity to make big profit.”
According to Otedola, “more worrisome is that these mushroom marketers are not established and do not have the infrastructure to store, transport and handle Jet A1 fuel in such a manner to eliminate contamination which is a key safety requirement for Global Aviation Practices. The proper care and handling of ATK is paramount in maintaining safe aircraft operations. One of the requirements that operators with high safety standards try to ensure is that their fuel is free from contamination.”

The chairman of Forte Oil noted that “contaminated fuel can cause significant damage to the aircraft and engine. Damage can range from fuel system corrosion, clogging of fuel filtration components, failure of aircraft fuel system instrumentation, and even stopping the fuel supply to the engines during flight. But with proper handling procedures in place, fuel contamination capable of causing problems to the aircraft can be eliminated.”

Otedola said Jet A1 DEF STAN 91-91 (UK) and ASTM D1655 (international) specifications allow for certain additives to be added to jet fuel. “These include; antioxidants to prevent gumming, antistatic agents, to dissipate static electricity and prevent sparking, corrosion inhibitors and fuel system icing inhibitor.

“Based on the foregoing, it is pertinent that the unwholesome activities of these mushroom operators be curbed in order to ensure highest levels of safety and global best practice in the Aviation industry in Nigeria.”

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  • Joseph

    This is a jaw-dropping revelation. Illegal petroleum dealers will not like the sound of it. Government should swing into action to regulate their activities.

  • Asuquo Bassey

    Please FG take note and do the needful for the safety of our Aviation sector. God bless Nigeria

  • Ojiyovwi

    A government has no business running refineries. These are best run by private companies whose profits can then be taxed for the benfit of the citizens.

    • Kenneth Adebayo

      This is what the previous petroleum minister suggested as well, except she cautioned against rushing into privatisation haphazardly. Kachikwu seems to be taking that advice.

    • bigbang

      You are right, but Nigeria is not ready to privatize the refineries. We are still trying to fix the mess of the power sector privatization. Maybe in about 15 years we will be ready. But not right now. Joint ventures will be the way to go.

  • bigbang

    It is not the NNPC decision. It is the president decision. Buhari said no.