House Halts NNPC’s $400million Loan Bid for Refineries Repair

The House of Representatives Committee on Privatisation and Commercialisation on Thursday, July 21, put a stop to the bid by the Nigerian National Petroleum Corporation, NNPC, to acquire a $400 million loan for the upgrade of the four refineries in the country.

The committee, headed by Hon. Ahmed Yerima said the state-run oil firm was breaching Section 11 (g) of the Public enterprises ( Privatisation and Commercialisation) Act 1999, which gives the National Council on Privatisation (NPC) the power to do such, The Nation reports.

Members of the committee said the NNPC should suspend outrightly the proposed restructuring/privatisation of the refineries because of the breach of the regulations in the Bureau of Public Enterprises (BPE) as well as the Presidency’s delay in inaugurating the National Council on Privatisation (NCP).

The committee said it will formally communicate President Muhammadu Buhari on the need to adhere to due process and avoid the pitfalls in the commercialisation and privatisation exercises that were made in the past.

It noted that breach of policy guidelines and extant regulatory framework and undue rivalry among government agencies is giving investors concern.

According to NNPC document submitted to the Committee and obtained in Abuja, “in 2015, the refineries posted combined losses of N82 billion and processed only eight million barrels of crude in total.”

At the meeting which held on Thursday, July 21, the failure of the NNPC management to present documents showing the approval allegedly given by the President for the proposed improvement of the refineries’ capacity utilisation to 80 per cent within one year on the basis of the subsisting ownership structure, upset members of the committee.

Also the $50 million agreement signed by NNPC with a Chinese company, without any clear work plan got the disapproval of the legislators.