*The refineries have continued to be a drain to the economy
The federal government’s Economic Recovery and Growth Plan (ERGP), which contains the road map for Nigeria’s economic development, has already failed in its target of revamping the refineries to reduce petroleum product imports by 60 per cent in the year 2018 which just ended. By that medium term economic blueprint, the country is also expected to become a net exporter of refined petroleum products by 2020, which is another mirage.
Nigeria is the 12th largest oil-producing nation in the world, with an estimated 37.2 billion barrels of crude oil deposits and seventh in the world in terms of gas reserves of about 187 trillion cubic feet. But she is not among the top three countries in Africa in terms of refining capacity. It also has the unsavoury distinction of being the only member country of the Organisation of Petroleum Exporting Countries (OPEC) that depends on imported refined petroleum products. Yet, the country has four refineries, two in Port Harcourt (PHRC), and one each in Kaduna (KRPC) and Warri (WRPC), with a combined installed capacity of 445,000 barrels per day (bpd).
But in spite of such a staggering potential, the country has for about two decades lived with the infamy of importing refined petroleum products to service local consumption at huge economic and social cost. Senegal runs one refinery with a 27,000bpd capacity; Cameroon has one with 42,600bpd; Congo, 21,000bpd; Niger Republic, 20,000bpd; Chad, 20,000bpd; Zambia, 34,000bpd; Gabon, 25,000bpd; Algeria, 499,000bpd; Libya, 380,000bpd; South Africa, 626,500bpd and Egypt 1,102,550bpd. None of these African countries imports fuel. Over the years, about $20 billion is reported to have been spent on Turn Around Maintenance (TAM) of refineries by the Nigerian National Petroleum Corporation (NNPC), but none of them worked up to their capacity at any time.
Sadly, the rehabilitation of the refineries has remained the unrelenting mantra of every administration since 1999, including the incumbent administration. The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu had vowed on assumption of office that the refineries would start work by December 2015, directing the management of the refineries to be efficient in operating the plants or get fired. He also declared that any of the refineries that failed to come up by the end of 2015 would be sold. He was however overruled by President Muhammadu Buhari, the substantive petroleum minister, who foreclosed outright sale of the refineries as an option. A joint venture model was later adopted to attract private funding in the rehabilitation and operations of the refineries, designed to concede the management to a consortium of private players that would emerge in a competitive bid process.
The failure of the refineries has not only ridiculed the nation globally, but has thrown up huge socio-economic implications. For the country and millions of its innocent citizens, fuel importation is a euphemism for misery. We cannot forget in a hurry the emergency billionaires thrown up by fuel import racketeers, who went into a frenzy, in obvious connivance with some unscrupulous officials, swindling a hapless nation of hundreds of billions of naira for non-existent imports.
Currently, the management of NNPC has come up with a nebulous “cost under recovery” to spend unbudgeted funds to subsidise fuel imports, and has been struggling to explain its position in the alleged N1.4 trillion annual import bills, another $3.5 billion escrow account for Petroleum Support Fund as well as allegations of illegal deductions from Nigeria’s dividends from profits posted by the Nigerian Liquefied Natural Gas (NLNG) Limited. The state oil company has cashed in on the seeming helpless situation caused by the continuing importation of fuel to overreach itself by spending unappropriated funds, including NLNG dividends accruing to the federal government. We cannot continue to subsidise failure which the refineries clearly represent, at great national cost.
SOURCE: OperaNews.com
