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Senate Rejects Move To Remove Subsidy, Probes 43 Refinery Licences

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Senate Chamber

The Senate yesterday rejected move to remove oil subsidy insisting that it will make the prices of the products to go up.

The red chamber also said it will investigate the 43 refineries licences granted to Nigerians who are yet to commence operation.

The lawmakers urged companies who were granted licences to immediately commence building and operation just like the Dangote refinery. 

Lawmakers urged its Petroleum Committee  on  downstream and Upstream to invite the Ministry of Petroleum and the Nigerian  National Petroleum Corporation (NNPC,)to brief it on the status of existing refineries including the status of newly licensed  modular refineries in the country.

The decision followed a motion  by Sen Rose Oko (PDP – Cross- River) on a motion entitled, Existing Petroleum Subsidy: Ensuring  Self -Sufficiency in Domestic Refining of Petroleum Products.

Speaking on the motion at plenary, Oko said although Nigeria produces 1.7million barrels of crude oil per day but its moribund refineries had very little refining capacity.

She said the nation imports roughly 90 per cent of its fuel, negating much of the benefits accruing to oil producing nations from high crude prices.

She said despite the resources expended on turn around maintenance, none of the NNPC’s four refineries  currently functions  up to 50,per cent of  their  combined capacity of 445,000 barrels per day.

She said the objectives of modular refineries was to overcome the huge capital requirement that impedes establishment and maintenance of large scale refineries.

This, she said would  ensure self-sufficiency in the production and supply of petroleum products.

She said data from the Department of Petroleum Resources (DPR) website had indicated that a total of 633,000 barrels per day refining capacity had already been lost due to the expiration of licenses of both conventional and modular refinery projects.

Oko, who also spoke on the fuel subsidy said more than 160 million dollars was spent on subsidy in early 2017.

She said Nigeria had introduced petroleum subsidy in the 1980s as a temple art measure to strengthen local refining industry and improve product affordability and domestic consumption.

She, however, said successive administrations’ had failed to make Nigeria self-sufficient in domestic production.

The senator said despite the dire need to exit petroleum importation and subsidy, there was neither a comprehensive plan to ensure its actualisation.

She said there was no form of technical and financial aid for refinery  license holders to ensure the  refineries become operational.

Senators who supported the motion include Sen. Barau Jibril,Thompson Sekibo,Ifeanyi Uba,and Ali Ndume among others.

Ndume said he does not support removal of oil subsidy adding that private individuals are going into refinery and should be supported.

“It is still the responsibilities of the NNPC to find a way forward. Even if they remove the subsidy without adequate supply, there will be a problem. I am not supporting the removal of subsidy,” the Lawmaker said.

The senators said there was an urgent need to ensure the optimal performance of the refineries.

They also called for grants to support the actualisation of the 43 modular refineries  in the country.

The Senate in a voice vote urged the committee on petroleum downstream and upstream,when constituted to report back to the senate on the status of modular and existing  refineries in eight weeks’ time.

In his remark President of the Senate, Dr Ahmad Lawan said the motion was designed to ensure that the 43 licensed modular refineries became operational. He said there was the need to support them to become active. He said the senate must make it a duty to ensure the   establishment of the modular refineries. He said the Petroleum Industry Bill (PIB) was also key the optimal utilisation of the refineries and emergence of the modular refineries.

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