A case for Niger Delta indigenous oil refineries (2)

on   /   in Viewpoint 12:27 am   /   Comments

SO instead of destroying the  local refineries, government should conduct a census of the number of people engaged, evaluate their process of refining and their crude oil demand not with the intention of punishing those involved but with a view to having them documented and licensed after appropriate regulatory framework has been put in place.

Co-incidentally, Niger Delta people have a fine history of refining raw produce into fairly good quality products.For instance,distilled spirit,derogatorily  labelled illicit gin and also known as ogogoro,is often distilled and ferried to the urban centres by the Ijaws in the riverine areas of Bayelsa,Delta,Edo and Ondo states.

This is what is later blended and packaged for the high end markets by the better equipped distilleries.

Furthermore, it is my considered opinion that small scale refineries are not peculiar to Nigeria because they are in effect modular refineries which abound in the Western world and unfortunately not popular here because the  cash-laden NNPC is only interested in mega- projects like the four refineries in Port Harcourt,Warri and Kaduna which are constantly undergoing turn around maintenance and yet hardly function at half capacity.

In fact,the recent pronouncement by the Minister of Trade and Investment, Olusegun Aganga about  a proposed foreign direct investment of  $4.5 billion in six modular refineries reinforces the case for small scale refining in Nigeria.

But NNPC’s denial of involvement in the deal suggests that the proposal like the Liquified Natural Gas,LNG, project which was on the drawing board for over 20 years before coming on stream, the Aganga initiative maybe foreshadowing the LNG experience and therefore several years away from coming into fruition.

This is why relying on the local refineries in the Niger Delta to fill the gap created by NNPC’s refining shortfall ,should be given the consideration,and if viable the impetus that it deserves.

For a start,the crude oil (445,000 barrels per day) allocated to NNPC for local refining and most of which is currently being refined abroad and therefore against the intendment of the policy could be re-allocated to the local refiners in fulfilment of the spirit and letter of the regulation and by so doing create jobs at home.

Unlike the monstrosities in Nigeria,the Chinese in Niger Republic built at a record time of less than 24 months a much smaller production capacity refinery which is more useful and therefore instructive to Nigerian authorities that prefer constructing behemoths with attendant maintenance challenges.

In making a case for the Niger Delta indigenous oil refineries, it’s pertinent and germane that we consider the experience of the United States of America,USA, the copyright owners of the presidential democracy we are practicing.

At the nascent stage of US evolution, production of alcohol was prohibited via the 18th  amendment to the  constitution in 1920 so bootlegging was a major headache to the authorities because although importation of alcohol was banned, Americans liked to consume the commodity.Criminal gangs like the Mafia capitalised on the ban fuelling underground markets to the detriment of the economy.

The crime of bootlegging or alcohol smuggling abated when the trade became legalised through licensing in 1933 via the 21st amendment which repealed the ban.As the National Assembly embarks on the review of our Constitution, thinking out of the box by considering quaint and innovative ideas like bringing  more Nigerians into the oil/gas loop through encouragement of the establishment of small scale refineries,would do Nigeria and Nigerians a lot of good.

If found to be efficacious, the initiative would not only save Nigeria the lost revenue in excess of N200 billion that the Director General of Budget Office,Bright Okogu stated as short fall in the month of August oil revenue largely attributable to crude oil theft,it could also have a three-fold direct impact on the society as it would ,(1)save Nigeria the trillions of naira currently spent importing finished petroleum products,

(2)create the much needed jobs that are currently being exported via  unbridled importation and (3)boost the Gross Domestic Product,GDP, of our country when the small refineries being destroyed are allowed to thrive under close supervision with associated benefits.

For too long,Nigerians have acquiesced with myths that have no rational basis but are spun by civil or public servants for enlightened self-interest.

There was the myth that made Nigeria Airways an aviation monopoly until a few years ago when private airlines were licensed.See how Arik has now revolutionised air travel.

How about the conspiracy that allowing private ownership of broadcasting  stations would threaten security? Today, African Independent Television,AlT, ,owned by Raymond Dokpesi and Channels Television, founded by John Momoh, not the Nigeria Television Authority,NTA, or the Federal Radio Corporation of Nigeria,FRCN, are the dominant players in the industry.

Mr. MAGNUS ONYIBE, a development strategist,  wrote from Abuja.

    Print       Email