NNPCL-Dangote Refineries rift: HOMEF Demands Transparency, Investigation of Claims on Import of Toxic Fuels

By: Michael Mike

Health of Mother Earth Foundation (HOMEF) has demanded transparency and an investigation into allegations of importing and foisting ‘dirty’ fuels on Nigerians.

HOMEF, in a statement on Wednesday, advocated this in reaction to the feud between the Nigerian National Petroleum Corporation Limited (NNPCL) and Dangote Refineries, noting that the NNPCL’s inability to refine petroleum products has been an enormous shame and embarrassment to the nation.

The statement said over the decades, NNPCL’s poor performance has forced Nigeria into the vice grip of forces of exploitation of colonial proportions, making her the largest exporter of crude oil and, at the same time, the largest importer of refined products of dubious quality.

Executive Director, HOMEF, Nnimmo Bassey, in the statement, noted that the company has epitomised one of the worst that can be imagined of any raw material exporter post- colonial state anywhere in the world.

He explained that while HOMEF acknowledges the high ecological costs of the entire petroleum industry value chain, it regrets that the failure of the comatose NNPC refineries is a critical factor that has allowed toxic bush refineries to proliferate to fill the yawning gaps.

Bassey said: “The importation of refined petroleum products has equally foisted heavy economic pressures on the hapless citizens of Nigeria. The arrival of the Dangote Refinery has its own huge ecological baggage, especially regarding the plight of neighboring communities and the general environment. Besides, there are bigger issues related to the creation and operation of what has come to be known as economic zones of exemption.

“HOMEF is alarmed by the cloudy controversies around the Dangote Refinery. The role of the NNPC in the unfolding disputes highlights the opacity of the sector and the inbuilt boobytraps in the regulatory frameworks under which the sector operates. Nigeria entered the oil refining business shortly after independence, with the first refinery built in Port Harcourt to meet domestic needs and curb overreliance on importation.

“The Nigerian government acquired the refinery by successive increase of shareholding starting at 50% in 1965 and increased to 60% in 1972 and taking up sole ownership by 1978. The name also had a systematic shift from the Nigeria Petroleum Refining Company to NNPC Refinery, Port Harcourt.”

Bassey recalled that three other refineries were set up in response to the growing demand for refined products. They are Warri Refining and Petrochemical Company, with 125,000 barrels per day (bpd) capacity and commissioned in 1978; Kaduna Refining and Petrochemical Company, with 110,000 bpd capacity, commissioned in 1980; and the New Port Harcourt Refinery with 150,000 bpd capacity commissioned in 1989. The total installed capacity of all four refineries was 445,000 bpd.

He said: “By the early 1990s, the military government at the time ordered the NNPC to close all its accounts and transfer them to the Central Bank of Nigeria. This arguably marked the beginning of the downward spiral in the performance of the refineries that once served the local petroleum needs and the contributory feedstock needs of other dependent industries.

“Successive “democratic” governments continued to fan the embers of this unproductive but self-serving arrangement, solidifying it with Bills that followed and passed by cronies hooded in different cloaks. The sad realities in the sector include poor governance, poor or non-existent turn around maintenance for the refineries, industrial-scale oil theft, and even the appointments to offices for political control as seen in having serving presidents appointing themselves as Ministers of Petroleum.”

Bassey noted that the conundrum of dependency on exporting raw crude oil and importing refined products, along with corrupt subsidy regimes, remains intractable to date.

According to the environmentalist, the Dangote Refinery’s 650,000 bpd capacity could boost Nigeria’s refining capacity and meet its domestic petroleum needs. He said that the news that Nigeria, through the NNPC Ltd, would have a 20% share in the refinery raised questions, including why the corporation could not focus on making its own refineries work.

He said: “Now we hear that the 20% investment stymied at 7.2% due to the inability of the supposedly profit-making company to meet its financial obligations on schedule. Before the recent closed-door meetings between the Ministry of Petroleum Resources and the Dangote Refineries, there were insinuations and counter-insinuations suggesting an in-fighting. We hear of disputes over the quality of refined products and issues of whether full approvals have been obtained by the private refinery for it to even commence operations.”

Bassey quoted the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) as saying: “The refiners failed in operational approaches because there are operational standards for crude oil supply. These standards go along with international best practices. The local refiners will not put payment instruments in place as expected. They were not also revising delayed vessels at the right time. They will not fix the vessel to pick up the crude at the right time, or they will bring the wrong vessel specifications. These are operational inefficiencies on the part of the local refiners.”

Reacting to the situation, Bassey said: “It is time for the NNPC to come clear on the questions over the quality of products imported petroleum products as well as those coming out of the Dangote Refinery. Nigerians also deserve to know what volume of shares it holds in the refinery.
“The public deserves clarity about what is also going on with regard to subsidies on imported petroleum products since the purported elimination of subsidies provided one of the planks aiding the economic strangulation of the Nigerian peoples.”

Bassey also demanded a participatory social and environmental audit of all the country’s refineries and put in place environmental management plans to ensure the safety of fence-line communities in Lekki, Port Harcourt, Warri, and Kaduna.

Also, HOMEF’s Fossil Politics Programme Manager Stephen Oduware said: “If anything is clear, it is that there are huge transparency questions over the sectoral regulatory frameworks and that the artificially created complexities orchestrated by the NNPCL have heaped an avoidable burden on the masses.”

HOMEF called on the federal government to ensure the operations of all its refineries and equally activate an audit of the unfolding crisis.

“The government should also ensure a depoliticization of the petroleum sector. Another important step will be to ensure that the president of Nigeria does not double as the head of the Petroleum Resources Ministry.”

NNPCL-Dangote Refineries rift: HOMEF Demands Transparency, Investigation of Claims on Import of Toxic Fuels