Uncertainty Over future of PH Refinery

The shutdown of the old Port Harcourt Refinery plant by the top management of the Nigerian National Petroleum Company Limited (NNPCL) has raised concerns over the future of the Port Harcourt refinery.
The old refinery plant had resumed production a few months ago after undergoing a major rehabilitation that lasted for three years. But the management of NNPCL ordered its shut down after defects were allegedly found in the process system that hindered it from attaining full production.
Before the shutdown, the Economic and Financial Crimes Commission (EFCC) had arrested the former Managing Director of the refinery on allegations of diverting funds meant for the project.
The declaration of the shutdown came as a shock to major industry stakeholders who felt that the action could jeopardise the availability of petroleum products in the country.
The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), which expressed concerns over the shutdown called for strict adherence to the 30 days NNPCL gave for the maintenance of the old refinery so as not to disrupt the available of petroleum products.
PETROAN, National President, Billy Gillis-Harry, said PETROAN feared that the 30-day schedule might not be realistic due to usual bottlenecks which could lead to further delays and worsening of product supply.
Such situation, PETROAN said could exacerbate the economic hardship for millions of Nigerians.
PETROAN demanded inclusion of PMS Blending Unit in the 30-day repairs, “as the crude oil cracking process is of no value without it.”
It also said completing the repair on time would help maintain competition in the market, which will benefit consumers and the economy.
It demanded that a task force be set up to brief Nigerians on the job progress every weekend to ensure transparency and accountability in achieving the 30-day repair schedule.
“PETROAN recommends that payments to contractors handling the repairs be made promptly to avoid delays and ensure the project stays on track.”
The rehabilitation of the old refinery was part of a larger project that included the new Port Harcourt refinery executed by Tecnimont, an Italian company for $1.5 billion (N2.25 trillion). Both refineries were due to be completed by April this year, with the old plant due in 2023. But the projects could not be delivered on target.
Things began to take a twist after a new group management tam was appointed to replace the management team of Mr. Mele Kyari that was the Group Chief Executive Officer for many years. The new GCEO, Mr. Bayo Ojulari began a reform that has so far swept away the management teams of all the three refineries and other subsidiaries of the NNPCL group.
However, not everyone felt the new developments at the Port Harcourt refinery was entirely for good. It has been speculated that the developments at the refinery were geared towards changing the ownership structure of the refinery through a privatization process that will favour a company linked to people in government.
The Host Community Bulk Petroleum Retailers Association of Port Harcourt Refinery Depot, which responded to the shutdown of the refinery, raised an alarm over an alleged attempt by an interest group to sabotage the operations of the refinery.
At a press conference in Port Harcourt, the association said the supposed interest group was bent on stalling operations at the Port Harcourt refinery so that an unnamed private refinery could benefit from the shutdown.
The association warned against cutting crude oil supply to the Port Harcourt refinery during the maintenance period.
The Chairman of the Group, Chief Sunny Nkpe, requested the Mr. Ojulari, to as a matter of urgency appoint a substantive managing director for Port Harcourt refinery to drive the rehabilitation of the plant.
“They said they are shutting it down for repairs. We don’t believe it. It’s an attempt to shut it down like Warri (refinery) and other areas,” Nkpe said.
The Chairman also demanded that the Refinery Coordinator, Mr. Bayo Aderenle be removed, stating that his activities were inimical to President Tinubu’s reform agenda.
Also speaking, Dr. Joseph Obele, said the price of fuel could jump to N2,000 a litre if the shut refinery does not resume production soon.
“Recall that that last July when a particular refinery started, PMS was selling for N1,000 per litre. As at October/November when the old refinery came on, it came down to about eight to nine hundred naira.
“Nigerians should understand that this recent shutdown could be an orchestrated way to give monopoly to a particular refinery and if that happens, Nigerians will buy fuel at N2,000 per litre,” Obele said.
The host Community retailers association called for timely and sufficient funding of the rehabilitation projects.
Fuel prices have however since the shutdown of the old Port Harcourt refinery remained stable.