April 13, 2020

FG’s rescue plan for the refineries

FG’s rescue plan for the refineries


FROM regime to regime, the Federal Government has been visionless in its approaches toward the revival of our moribund refineries and resumption of local refining of petroleum products in Nigeria.

We had hoped that the Muhammadu Buhari regime would live up to the All Progressive Congress, APC’s “Change” mantra, but it has not worked out that way.

What buoyed the expectations of Nigerians was the President’s decision to handle the Petroleum Resources portfolio while appointing Dr. Emmanuel Kachikwu, a highflying private expert, as the Minister of State whom he had upgraded as the GMD of the Nigerian National Petroleum Corporation, NNPC.

Kachikwu was ready to embrace the needed reforms but politics was thrown into the fray and he was swiftly sidelined.

Buhari, the Minister, faded from the picture and the oil sector, especially the NNPC, continued to run on exactly the same model which the 2014 PriceWaterhouseCoopers forensic audit had recommended for a total clean-up and privatisation.

During the 2019 general election campaigns, the presidential candidate of the Peoples Democratic Party, PDP, Alhaji Atiku Abubakar, had promised to privatise the NNPC and the three state-owned refineries.

Buhari’s supporters accused him of planning to sell the state monopoly and refineries to “his friends”.

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The GMD of the NNPC, Mele Kyari, set the Social Media abuzz last week when he unveiled the FG’s plan to hand over the refineries to private sector operators after their planned upgrade is completed in 2023. Critics are putting the same allegation on them that care should be taken to ensure that the fund secured for the upgrade is not stolen, and that the refurbished refineries do not end up in the hands of “the cabal” or their proxies.

It is obvious that the Buhari administration, after nearly five years in power, has chosen to adopt the idea pushed by the Director General of the Infrastructure Concession and Regulatory Commission, ICRC, Chidi Izuwah, and the Dangote Group at the Nigerian International Petroleum Seminar, SNIP, held in Abuja in January 2019 for the federal Government to hands off the running of the refineries and give them over to the private sector.

Experts in the industry had argued that the idea of scrapping the refineries as being pushed by some is not an option since the refineries can be upgraded and effectively managed by the private sector.

We hope the upgrades proceed as planned. If successful, the refurbished refineries will combine with the Dangote refineries to make Nigeria self-sufficient in petroleum products. It will also end the importation of the products.

We should march with determination toward the end of government involvement in the petroleum business.

Let the market take over fully, with government creating the enabling environment for optimum productivity and also ensuring that the consumers’ interests are fully protected.