Home Economy Buhari Inherited N600bn Oil Marketers’ Debt, Says FG

Buhari Inherited N600bn Oil Marketers’ Debt, Says FG

  • NNPC: PH, Warri refineries now produce 7m litres of petrol daily

By Tobi Soniyi and Chineme Okafor in Abuja

The presidency yesterday said President Muhammadu Buhari inherited N600 billion debt owed fuel marketers by the former President Goodluck Jonathan’s administration. 

This is contained in a statement issued in Abuja yesterday by the Senior Special Assistant to the President on Media and Publicity, Mr. Garba Shehu, wherein he announced new measures put in place by the presidency to roll back poverty. 

Among these measures are the directive by  Buhari for the release of 10,000 tonnes of grains from the national strategic grains reserves for national distribution to counter food price increases and the intolerably high exploitation of common people by the trader-class.

Buhari has also directed the Minister of Agriculture to ensure that all the able-bodied men and women in internally displaced persons (IDP) camps be assisted to return to farming immediately. 

This is coming as a reaction to calls for government measures to ease hardship associated with food inflation. 

Shehu said: “At the time the Buhari government came to power, about N600 billion was owed to fuel marketers in subsidy payments. Strategic fuel reserves were depleted and local refineries were not functioning. 

 “One of the president’s first steps was to pay off the marketers, leaving an outstanding of about N150 billion which was captured in the 2016 budget.  

“The Port Harcourt and Kaduna refineries are being brought back to life. In a matter of time, Nigeria will resume refining its own fuel rather than depending on imports. 

 “As part of the permanent solution of recurring cycle of petroleum products shortages, government is working on a plan to ensure that some of the newly-licenced independent refineries start coming on stream from 2018.”

Shehu said the government would also turn its attention to the sabotage of the oil and gas infrastructure that had taken so much away from the generation and distribution of electricity.

The presidency also reiterated its earlier position  that the devastation of the economy was caused by the Boko Haram insurgency, corruption and the lack of planning by the past administrations and one that should not be blamed on the ‘Change Agenda’ of the Buhari administration.  The statement read: “The presidency firmly rejects the insinuations that poverty and lack are products of the change mantra. This should be dismissed as an erroneous and misplaced opposition criticism. 

“The president understands the pain and the cries of the citizens of this country and he is spending sleepless nights over how he can make life better for everyone. 

Shehu said  contrary to assertions by a faction of the opposition Conference of Nigerian Political Parties (CNPP), the president’s energy and focus were on changing the life of Nigerians, with a view to making  it better than he met it. 

 “Change is a process. Change does not happen overnight. Change can be inconvenient. Change sometimes comes with pain. Over the past year, the government has been working night and day to deliver on its promise of change to Nigerians, and the painful process is still ongoing,” the statement added.

According to him, As life gradually returns to normal in f the country and the North-east in particular, agriculture will resume and traders from neighbouring African countries will once again feel safe to do business with Nigeria yet another boost for our economy. 

He stated that it was only when the people appreciated where the country was coming from that they would grasp the full meaning and essence of what the ongoing  journey entailed 

Shehu estimated that three North-east states of Nigeria alone had so far lost about N3 trillion ($9 billion) to the Boko Haram insurgency. 

 He also quoted the previous administration as saying the federal government’s losses amounted to about $18 billion.

The president aide said it would have been a miracle for Nigeria’s economy to not feel the effects.

He said in addition to the thousands of lives lost to the insurgency, thousands had also lost their means of livelihood. 

“The North-east region of Nigeria is a mostly agrarian society, which means Nigeria has lost billions of naira in agricultural produce,” he added.

The statement continued: ”Other ongoing plans for change include those for social investment. For example, one million poor and vulnerable Nigerians will soon receive monthly  payments of N5000 to allow them live decently. This programme is designed to recognise the need for ordinary, poor Nigerians to also benefit from the resources of the country. President Buhari believes that the resources of our country should be spent also on the vast majority of our people who are poor and vulnerable, and not squandered by government officials or the elite. 

“This social investment plan is already provided for in the 2016 budget. The World Bank has begun conducting a social register on poor and vulnerable people in Nigeria, by going to the four poorest local government areas and then the four poorest communities in those poorest local government areas. 

“About 7 to 8 states have been completed already. Now the presidency is working with the World Bank and the Bill Gates Foundation on how to identify the people to be paid the N5,000 and how they will be paid.

“This is the first time that the federal government of this country will be spending this much on social welfare for poor, bearing in mind that the money will go directly to the beneficiaries.

“Another programme, also included in the 2016 budget and also targeted at the poor, is the provision of soft loans to one million traders, market men, artisans, etc.  These are not the kind of loans that require collaterals that the people can’t afford or provide. No. The loans will come through the Bank of Industry, but this has also been included in the budget. 

“In addition to all these, 500,000 unemployed graduates will be directly employed as volunteer teachers but paid by the federal government to teach in their communities while they search for better jobs in their areas of expertise. 370,000 unemployed youths will also be trained in skills acquisition and paid while doing so. 

“These are just some aspects of the change that Nigerians voted for, a change that is happening and which will soon be felt by Nigerians in every nook and cranny of our country. 

“Nigerians are a people renowned for our inner strength and our ability to triumph. These are just the darkest days before the dawn. The change Nigerians voted has indeed begun.”

 Meanwhile, the Nigerian National Petroleum Corporation (NNPC) yesterday said two of its refineries in Port Harcourt and Warri are now producing seven million litres of petrol everyday.

NNPC stated this in statement from its Group General Manager Public Affairs, Mallam Garba Deen Muhammad, in Abuja.

It quoted the Minister of State for Petroleum Resources and its Group Managing Director, Dr. Ibe Kachikwu, saying that the Port Harcourt Refining Company now produces five million litres of petrol while the Warri Refining and Petrochemical Company produces two million liters of petrol daily.

Kachikwu, the statement explained, had said this while re-commissioning the Bonny-Port Harcourt Refinery crude oil pipeline that has just been rehabilitated after it was out of use for so many years due to incessant pipeline vandalism.

According to the statement, the minister stated that Kaduna refinery is also scheduled to start production any moment from now.

He added that the coming on stream of the three refineries would go a long way to ensure sufficient supply and distribution of petrol across the country.

He said the NNPC under his watch has been able to recover the two critical crude supply pipelines which are Escravos to Warri and Bonny to Port Harcourt crude supply pipelines, stressing that they are critical to the downstream sector of the industry.

“Port Harcourt is back in production, Warri is back in production, Kaduna as at today is receiving crude and will soon be back in production.

“Lagos is easing off now from fuel scarcity and Abuja is doing the same thing and once Kaduna begins production, the north will see a lot of improvement,” said Kachikwu in the statement.

He added that for the first time in many years, the three refineries are going to be working and it will help in a great deal with the issue of fuel supply and distribution across the country.

He noted that a commercial governance model system was being introduced into the refineries to keep them in business as well as enable them compete favourably in the hydrocarbon value chain.

According to him: “What we have done is to find a very creative way of bringing investors who will come in, work with our team here who have the skills, reactivate and upgrade facilities in these refineries.”

He said the investors would also help provide technical support for the refineries, for which they will be paid through the flow out of refined products over a period of time.

Kachikwu explained that under the model, whatever the refineries produce will be theirs and they will sell to one huge customer which would be both Nigerian Petroleum Marketing Company (NPMC) and independent marketers.

He also noted that the misgivings that the NNPC plans to hand over the refineries was not true, saying that President Muhammadu Buhari was very clear from day one, that at this point in time he was not ready for that.

“We are not inviting foreign partners to take over the refineries, we do not have the funds, even now that they are working, they are probably working at about 60 per cent or below capacity so you need to upgrade these refineries and get them to a level where they will operate at 90 per cent capacity or more.

“It requires money and total investment for that is in excess of about $700 million and we don’t have it,” he stated.

Meanwhile, the Nigeria Extractive Industries Transparency Initiative (NEITI) has clarified issues relating to the divestment of eight oil blocks by the NNPC to its upstream subsidiary, the Nigeria Petroleum Development Company (NPDC) in 2011, admitting that it misrepresented and quoted the NNPC out of context.

NEITI had in a statement it issued at the weekend quoted NNPC’s Group Executive Director in charge of Finance and Accounts, Ishiaka Adbulrazak as saying that the NNPC has acknowledged that the transaction leading to the asset divestment was not transparent and requires investigation.

According to NEITI, Abdulrazak supposedly made the disclosure while speaking at a meeting between the Chairman of the board of NEITI, Dr. Kayode Fayemi and the NEITI management led by the Executive Secretary, Waziri Adio in Abuja.

“On the divestment of oil wells by the NNPC to NPDC at the cost of $1.8 billion for which only $100 million has so far being paid, the GED agreed with NEITI position that the transaction was not transparent and requires comprehensive independent investigation,” NEITI had said in the weekend statement.

It further quoted him to have said: “We in the new management team of NNPC have reviewed that transaction and totally agree with NEITI that the transaction was not transparent and should be investigated.”

But admitting that it quoted the NNPC out of context in a statement yesterday, NEITI’s Director of Communications, Orji Ogbonnaya Orji, said: “NEITI wishes to clarify its earlier statement that the Group Executive Director, Finance of NNPC, Mr. Isiaka Abdulrazaq, had claimed at a recent meeting with NEITI that the assignment of eight oil blocks by NNPC to one of its subsidiaries, the NPDC, was not transparent and would be investigated.

“NEITI wishes to state categorically that Abdulrazaq did not say that the transaction was not transparent; neither did he say the new NNPC management would investigate the transaction… An internal review by NEITI has confirmed that Abdulrazaq was quoted out of context and was misrepresented in our earlier statement,” he added.

While regretting quoting the NNPC out of context, NEITI said the mix up was occasioned by a discussion about the full payment of the consideration for the divestment and some reconciliation issues flagged in the finalised 2013 NEITI audits.



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