•This looks like another job for the boys. Sell the refineries. Finish!
Finding a solution to the obsolete public-owned refineries that have constituted a drain on the country’s economy has become a Gordian knot. Regrettably, these refineries, instead of refining petroleum products for Nigerians, have become conduits for creaming into private pockets, the country’s scarce resources through the so-called Turn Around Maintenance (TAM). This trajectory is the cause of the biting fuel scarcity across the country; and it is unacceptable.
So, when the Managing Director of the Nigerian National Petroleum Corporation (NNPC), Maikanti Baru, said the corporation was close to selecting financiers for another TAM, the sceptical populace would jeer and say: here they come again. According to the NNPC spokesman, Ndu Ughamadu, Baru said: “We are pushing towards the final selection of our financiers and we expect that when that is done… we will start the rehabilitation of the refineries towards a 90 per cent capacity utilisation per stream day before the end of 2019.”
Going through the official website of the corporation, the former spokesman, late Dr. Levi Ajuonuma, declared in 2010: “I am glad to announce to Nigerians that the Turn Around Maintenance of refineries embarked upon by the NNPC is beginning to pay off as the Kaduna refinery fully came on stream last Friday and has stabilised at 60 per cent capacity,”. Yet, at the Annual General Meeting of NNPC’s three refineries, in December 2016, the Chief Operating Officer, Anibor Kragha, said: “The plan for next year is to get the comprehensive rehabilitation programme done. The situation is like having three cars in your garage that have not been maintained for 15 to 20 years while you expect optimal performance from them.”
Fifteen to 20 years? So, Nigerians are sceptical about another TAM, despite Baru’s excitement, considering the billions of dollars that the Federal Government has wasted on that, over the years, without result. Even more worrisome is the financing model, which will be guaranteed by the Federal Government. So, has Baru struck the right chord? We doubt! Indeed, we fear that such financing model may be an opportunity for some people to corruptly enrich themselves, if our experience is anything to go by.
What we have advocated after the serial failures of the past years, is for the Federal Government to sell off the refineries to private investors, and not to guarantee more funding, which will likely be mismanaged by public officials. If the refineries are sold, then the new owners can test their viability as collateral, to raise funds. We therefore urge the NNPC to halt its efforts to raise new funds and focus on selling the refineries.
When the current Minister of State for Petroleum Resources, Ibe Kachikwu, was the Managing Director of NNPC, the government promised Nigerians a new set of private refineries that will be co-located with the old ones. That promise was recently repeated by the NNPC spokesman, and we think Baru should devote more energy to that. Again, this administration also inherited the promise of modular refineries, which it agreed was still feasible.
This administration even tinkered with the idea of allowing the illegal refineries operating in the Niger Delta to turn to modular refineries, as another way of solving the agitation and unemployment in the region. With this regime more than 30 months in the saddle, instead of announcing the birth of these promises, Nigeria is being served a new template for raising funds to maintain what we have all agreed is a waste pipe. Such a decision can only be made by public officials who know that the repayment will come from the public purse.
