Nigeria loses N700b on Kaduna refinery, pays N12b annually to idle workers

Oniwon-NNPCA NERVE-RACKING revelation has come from the Senate Committee on Petroleum (Downstream) that the Federal Government is losing over N700 billion yearly due to the comatose nature of the Kaduna Refining and Petrochemicals Company (KRPC).

The chairman of the committee, Senator Magnus Abbe who disclosed this on Tuesday when the committee visited the plant on oversight function added that the Federal Government spends a whopping N12 billion yearly on staff salaries in the company.

Abbe who spoke after a tour of the plant lamented that instead of focusing on the core mandate of the company which was refining of petroleum products, the company has resorted to producing of drums for oil companies due to decay in its infrastructure. He equally expressed displeasure that the company established over 20 years ago with production capacity of 110, 000 barrels per day could not refine even 30,000 barrels per day.

“We are not happy with the situation in this refinery. It is shocking that the refinery built over 20 years ago with a capacity of 110,000 barrels is operating at low capacity. One appalling thing is that a plant built for refining products is converted to a container-making firm. We are doing this when we are paying N12 billion annually as staff salaries. We are going to find out why you are importing crude. It is not that the plant is not working, but there is no immediate plan to revive it’’, he said.

Still counting the losses the Federal Government incurs in the plant, Abbe said the investment in the plant was with the hope that by now Nigeria ought to have received returns on the investment.

He added: “It is more annoying if you consider the investment on the refinery. 110,000 barrels at 90 per cent capacity, we could be making more than N719 billion annually. The country would have been able to tackle the problem of infrastructure that we are talking about today. Instead of turnover of over N700 billion, we are battling with obsolete equipment. We are shocked by the obsolete facilities that we have seen here, particularly in the control room. The Nigerian people expect more from this plant”.

Expressing dismay over the operations of the plant, Abbe said: “Another baffling issue is that you collect crude from the Pipelines, Product and Marketing Company (PPMC) without proper costing. There is a lot of work to be done here’’.

He asked the management of the plant to submit to the committee the original cost of building the plant, the jobs that the plant has done, and the staff audit.

The Managing Director of KRPC, Bolanle Ayodele, expressed appreciation over the visit of the committee and expressed hope that intervention would come to rescue the plant. He regretted that assets in the plant had been deteriorating over the years because Turn Around Maintenance (TAM) was not carried out on schedule. Ayodele added that instead of the statutory two years period, the plant had suffered neglect.

“Down the line, as the integrity of the assets deteriorated and the company, by virtue of its location, continues to suffer from irregular crude supply owing to pipeline vandalism and inadequate maintenance, it became difficult to sustain steady operations.  “Today, the assets require a comprehensive rehabilitation to ensure a strong and healthy business’’, he said.


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