Kyari: Security agents connive with pipeline vandals
Senate to FG: End subsidy
igeria lost a cumulative revenue of $1.55 billion due to vandalism of oil pipelines in 2018 and 2019.
Specifically, the vandalism of oil assets cost the country $825 million in 2018 while $725 million was lost to pipelines vandalism in 2019.
Group Managing Director (GMD) of the Nigerian National Petroleum Corporation (NNPC), Mr. Mele Kyari, made the revelation yesterday in Abuja.
Kyari also accused security agents of conniving with criminals to vandalise petroleum pipelines in the country.
He made the accusation at an interactive session with the Joint Senate Committee on Petroleum Resources (Upstream and Downstream) on “Exiting Petroleum Subsidy: Ensuring Self-Sufficiency in Domestic Refining of Petroleum Products.”
This was as the Senate tasked the Executive arm of government to do everything within its jurisdiction to exit fuel subsidy, and redirect the huge subsidy resources into meaningful and developmental projects that would benefit majority of Nigerians.
The NNPC boss told the Senate joint panel that this year alone, the country had lost about $48 million worth of crude oil due to pipeline vandalism.
He, however, said the number is lower when compared to what transpired in the past years, attributing the reduction to the increased surveillance by the security agencies.
He alleged that pipelines were being destroyed within townships, not in the bush, with the connivance of security agents, security contractors and community leaders.
Kyari said the corporation had decided to hand over the pipeline security completely to the security agencies, saying, “It is their work to secure government property.”
Commenting on the issue of fuel subsidy, the NNPC GMD noted that several attempts had been made in the past to end subsidy but to no avail.
“There are several attempts in the history of this country to walk away from subsidy in petroleum. Until March this year, there were no subsidy on aviation fuel, but the one we couldn’t walk away from is subsidy on petrol,” he said.
Kyari lamented the sharp fall in the price of crude, saying that it had negatively affected the country’s projected oil production per day.
“We have never seen this price collapse in the history of oil. The price fell from $50 per barrel to less than $10 and no country is prepared for this. Nobody saw it coming. The result of this is revenue collapse because there is a direct correlation.
“Today, in our effort to ensure price stability in collaboration with the rest of the world, our daily crude oil production is at 1.48 million barrels per day.”
Kyari observed that in the revised budget passed by the National Assembly, the daily crude oil production was put at 1.8m barrels per day, but that the country could only produce 1.7 million, stressing that it was impossible to reach 1.8 million bpd in two to three months.
“We are better off producing 1.7 million and once the price gallops up to $45, we can accommodate the difference.”
He said that this year, about 54 million litres of petroleum product are evacuated from the depot daily but the consumption was below that.
The GMD also said the NNPC had no knowledge of the amount of products that was transported through Nigeria’s borders to neighbouring countries.
On Kaduna, Warri and Port Harcourt refineries, Kyari blamed the problem on the failure to carry out proper turn around maintenance.
He said the best two refineries, Warri and Port Harcourt, were only producing a little above 25% of their capacity when they were running in 2018.
He said N64 billion was spent to resuscitate Kaduna refinery, but still it didn’t work.
On the other hand, the Senate also pointed out that ending fuel subsidy would help to tackle the problem of diversion of petrol to other countries by the marketers, saying that it was subsidy that made the illicit trade attractive to those involved.
Chairman of the Joint Committee, Senator Sabo Mohammed expressed serious concerns over the way and manner fuel subsidy was managed between 2018 and 2019, saying that it arbitrarily skyrocketed.
He also berated the management of the NNPC for violating the provisions of the Constitution, by not subjecting its budgets to National Assembly’s scrutiny.