The Group Managing Director of NNPC, Dr. Andrew Yakubu,has said that government would need well over N480 billion to upgrade and rehabilitate vandalised pipelines that convey crude oil to the Kaduna refinery before it could be brought to the expected 90 per cent production capacity in the next two years.
The NNPC boss who was speaking in Lagos at the annual conference and award organised by the National Association of Energy Correspondents (NAEC) said that the fixing of these pipeline was also a priority in rehabilitating the nation’s three existing refineries.Part of this project he pointed out, would require some of the pipes to be refurbished and some to be buried deeper into the ground. “To convey crude from Warri to Kaduna refinery and to have the refinery operate at a maximum capacity of 90 per cent, there must be a sustainable supply chain without any interruption by way of vandalisation,” he said.
The NNPC GMD who was represented by Dr. Timothy Okon, a top NNPC management personnel said that the board of NNPC has already approved the commencement of the rehabilitation of the three refineries and in the next two years, the refineries would be operating at 90 per cent capacity.
According to him, there was the need to fully deregulate the nation’s oil and gas down stream sector in order to attract investors to invest in establishing local refineries. He argued that the present situation in which it was difficult for any investor to decide the price at which the petroleum products being refined could be sold was discouraging private investors in setting up refineries.
He pointed out that such regulated downstream sector was prune to abuse as seen in the petroleum subsidy scam. In addition to this, the NNPC boss emphasised that a regulated downstream sector distorts the market demand. He wondered why subsidy should be allowed to continue in the petroleum downstream sector since it was not to the benefit of those it was intended for in the first place.
He advised that that the government needed to get the distribution network for the petroleum products right to make the price of the products affordable to Nigerians,adding that this was one of the major problems being faced in the case of Kerosene and that was why consumers were getting the product at a high price.