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We have no refineries; we have scraps – Dele Sobowale

The corporation’s refineries should be allowed to wither away in our view— FBNQuest Capital Limited, a subsidiary of FBN Holdings Plc.

ONE of the reasons Nigeria has never developed as well as her great potentials will suggest is that we live on collectively accepted lies. Among the most enduring is the idea that this country has four refineries. We have a Ministry of Petroleum Resources, the Nigerian national Petroleum Corporation, NNPC, which we claim operates four refineries with combined refining capacity of 445,000 barrels per day. The refineries meanwhile were established from 1965 to 1980.

A picture taken on September 16, 2015 shows workers trying to tie a pipe of the first refinery in Nigeria, which was built in 1965 in oil rich Port Harcourt, Rivers State. The Port Harcourt refinery is Nigeria’s oldest, built in 1965, nine years after crude was first found under the marshy soil and creeks of the delta, where the Niger river meanders to the Gulf of Guinea. Refineries in nearby Warri and Kaduna in the north central region were built in the years that followed, while a new plant was added to the same site in Port Harcourt in 1989. In recent years, however, it became a byword for corruption, a murky, state-run body where billions of dollars in revenue apparently disappeared. AFP PHOTO

The “youngest” is the Kaduna refinery which is now 37 years old, very poorly maintained, and now shut down producing nothing. The others are 39 years old and 52 years old respectively. They are still producing nothing. On December 29, 2017, during the recent fuel crisis in Nigeria, I was in Kaduna and just for the record visited the scrap located in the ancient city to ascertain what it was contributing to the problem.

Predictably, the lights and air-conditioners were on; official cars were going in and out with managers and messengers. A lot of activities generating cost, wasting our natural resources were going on. The only thing absent was fuel. Around the refinery, fuel wars similar to those raging all over Nigeria were raging. That very much summarises the situation with the refineries today.

Unfortunately, it is not a new story. All the four relics of another civilization which we collectively call refineries have been in this situation for over twenty years. The only beneficiaries of their existence on our books as assets are the politicians and “militicians”who see the refineries as sources of easy money for their close associates, the workers who get paid irrespective of whether there is production or not and the organized labor leaders whose members dues will continue to flow into headquarters as long as the refineries remain in the public sector.

That explains why political leaders are reluctant to get rid of the liabilities they constitute; workers grumble about increasing unemployment if the gates are shut and PEGASSAN and the NLC  threaten to go on strike each time privatization of the refineries is on the table. Collectively unpatriotic they never consider that facing the truth that we have no refineries is the first step to sanity in this regard.

Had the NNPC been a private company owned by millions of shareholders, would the directors and shareholders allow the catastrophe to continue for five, ten or twenty years? Would they not have shut the gates and thrown the keys away leaving it anybody who wants to go and re-open it?

One thing is certain. If Nigeria had been fortunate to have a President in the same mould as Lee Kuan Yew, the father of modern Singapore, the Federal government would not have held unto those cesspools of corruption, waste and incompetence. But, we have been cursed by third world leaders taking the largest third world country down the path to ruin.

Among the arrangements they have put in place is the crude for fuel arrangement. Because our own decrepit refineries and their stupid managers cannot produce fuel, they are allowed to trade the crude allocated to them for imported fuel.

But, nobody needs to be a petroleum engineer or production to realize that this is idiotic. Refineries produce more than fuel. They also deliver several by-products which constitute the raw materials for other sectors of the economy – pharmaceuticals, building, agriculture, education, toiletries, paint, road construction etc. All these raw materials are lost when the crude goes abroad and have to be imported along with petrol and diesel. Consequently, we kill our local industries, increase our import bill, drive our exchange rate up and export jobs with crude.

It requires no great imagination to arrive at the obvious conclusion. Nigerian governments cannot manage refineries; they can only damage them. It requires even less grey matter to reach the next conclusion. Government should get out of the refinery business; relinquish the business to the private sector and stay out of fixing prices.

If ever a Nigerian president has enough sense to do that, three things will occur. First, Nigeria’s revenue will cease going down the drains in those refineries. Outflow of foreign exchange to procure raw materials available at our refineries will stop. And, most importantly millions of jobs will be created.

Incidentally, all these were included in an Economic Policy Guideline prepared for a presidential candidate in 2011 in case he won. He didn’t. By 2015 all the lessons of 2011 have been forgotten. But we still have a decision to make as a country about the refineries. If the last and lingering fuel crisis has not taught us a painful lesson, which must not be repeated, then we must rise up and tell the Buhari administration that we are sick and tired of refineries which don’t produce fuel and by-products. The refineries must work or be closed down – even if PEGASSAN will go on strike.

The rest of us will oppose them.  This particular nonsense must stop ASAP.


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Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.