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NNPC to remodel ailing refineries after NLNG model

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Mallam Mele Kyari , Group Managing Director of the Nigerian National Petroleum Corporation (NNPC)

The management of the Nigerian National Petroleum Corporation (NNPC) has assured Nigerians that it is ready to remodel its three ailing refineries after the Nigeria LNG (NLNG) model for optimal performance.

Speaking during breakfast shows on ChannelsTV and Arise TV on Wednesday, The Group Managing Director (GMD), NNPC, Mallam Mele Kolo Kyari, stated that having removed under-recovery (fuel subsidy) on premium motor spirit (PMS) otherwise called petrol, last month, the next line of action is remodelling the operations and management of the three refineries, Warri refinery, Port Harcourt (I & II) refineries and Kaduna refinery, after NLNG model.

NLNG model is a successful business model in Nigeria’s oil and gas industry, where the Federal Government owns 49 per cent stake while other shareholders control 51 per cent. This model allows the Board to take business decisions like privately owned businesses except in some cases where national interest needs to be considered like the Train7.

According to Kyari, “We made a very conscious decision to shut down our refineries. Today, after proper scoping, which was not done in the past, we know exactly what to do to get them back on stream. We have also secured financing to make sure they work optimally.

“Aside from proper scoping, we are also going to have an Operation & Maintenance (O&M) contract, a different model of getting the refineries to work. We are looking at the NLNG structure where world-class processes will always be in play. We’ve seen it work before with success.“

He said the stoppage of subsidy or under-recovery payment will ensure monies are freed up for the government to fund critical infrastructural projects such as education, health, roads and many others, for the benefit of the ordinary man.

“Ultimately, having the market to take care of consumption is the best way to manage the issue. Once the market forces come into play, the over-reliance on the oil Industry will cease and other sectors of the economy will quickly pick up.

”We decided that the fuel subsidy/under-recovery has to be stopped. In any case, the subsidy is an elitist thing because it is the elites that benefit. They are the ones that have SUVs (Sports Utility Vehicle), four, five cars in their houses. The masses should be the ones to benefit.

”The stoppage of subsidy or under-recovery payment will ensure monies are freed up for govt to fund critical infrastructural projects such as education, health, roads & many others, for the benefit of the ordinary man.

“There are many things wrong with the under-recovery (fuel subsidy) because we are supplying more than we need; we are supplying the whole of West Africa. Therefore the under-recovery (fuel subsidy) itself is so over-bloated because we are subsidising the whole of West Africa! That has to stop,” he said.

It may be recalled that while speaking on an African Independent Television (AIT) programme on Monday, Kyari stated that “There is no fuel subsidy anymore in Nigeria. It is zero subsidy forever. There would be no resort to either fuel subsidy or under-recovery of any nature. NNPC will play in the petroleum marketplace, just like another marketer in the space. But we will be there for the country to sustain the security of supply at market price.”

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