Local refining of petroleum products especially Premium Motor Spirit (PMS) is one panacea to ending the lingering energy crisis facing Nigeria today. However, why the 11th oil producing nation in the world could not refine petroleum products locally is troubling, it is baffling why maintaining even one or four of the existing refineries for over two decades has become problematic or rather a mirage. Since 1999, government has continued to bandy staggering figures it claimed to have ploughed into turn-around maintenance of refineries but there is nothing practically on ground to show.
With the perennial fuel scarcity ravaging the country, what stops the nation from building more refineries is even more disturbing. A responsible government ought to have known that the shock waves market forces sends into the economy on account of variations in global oil prices is a national economic burden. While countries without a barrel of oil like Singapore have local refining capacities, deliberate refusal by successive governments to put in place infrastructure that will drive the process points to the level of hypocrisy prevalent among Nigerian leaders.
Genuine effort aimed at finding lasting solution to the lingering problem of fuel scarcity was met with stiff resistance from elements benefiting therefrom. According to Ngozi Okonjo- Iweala, Nigeria’s former minister of Finance in her book; “Fighting Corruption Is Dangerous – The Stories Behind The Headlines” the sordid picture she painted on the problems around the reform she spearheaded in the petroleum industry was revealing. It defines the extreme capacity of beneficiaries of the subsidy regime to even kill those seen as constituting a stumbling block.
She said; “Based on the report findings and recommendations, it became clear that the finance ministry could not make payments to the oil marketing companies implicated in the fraudulent N 382 billion ($2.5 billion) in transactions. This decision was met with tremendous anger and resistance on the part of the companies whose transactions were implicated. There was also anger and impatience on the part of several companies not implicated because they felt the Presidential Committee’s Investigation and verification had further delayed their payments.
The tension was palpable throughout this time, and the head of the Presidential Committee, Aig Imoukhude, came to tell me that he was moving his family to London because he felt that these were dangerous times. The refusal to pay fraudulent marketers – many of whom had powerful connections in government and society – was a difficult and dangerous one, as I soon came to know when my mother was kidnapped, and I was threatened with being maimed to get me to leave office.”
The picture the former minister painted above took place in 2012. Between 2015 – 2021 a new report by the Nigerian Economic Summit Group (NESG) disclosed that subsidy regime which President Buhari on one occasion claimed has ended gulped N 3.64 trillion. The report stated that petrol subsidy grew from N 307 billion annually in 2015 to N 1.77 trillion in 2021. Nigerians should be informed that government officials from 1999 to date and oil marketers benefiting from subsidy regime are those behind the conspiracy to punish Nigerians and make local refineries non-functional. It is estimated that a refinery costs between $15-19 billion. From figures above, stolen money lining private pockets can build at least one additional refinery, if not more.
Refining the product locally is one immutable solution government has chosen to deliberately ignore. Local refining will not only drastically reduce the huge sum spent annually to service fraudulent subsidy regime, more jobs will be created at the long run. The right case of building modular refineries has lost steam. The nation and its leaders understood clearly the right approach to stemming the ugly tide but have deliberately refused to apply it. Parochial interest has overwhelmed national interest. Since efforts to improve the sector were built around enacting the Petroleum Industry Act, nothing tangible in the interim or on the short and long term was done to contain the shock of fuel scarcity and ameliorate the sufferings of Nigerians. The God given blessing has turned out huge curse and an albatross of Nigerians. It is unbelievable!
I align with the school of thought which believes that building more refineries in twenty two years is possible. Those at the corridors of power and their associates are the beneficiaries of the man-made problems they visited upon Nigeria. Those in government have private refineries abroad. Therefore, if they chose to improve on the local refining capacity, it will affect their economic interest. It is therefore, better to punish Nigerians on account of sustaining business interest than being patriotic. By refining petroleum products abroad, Nigeria creates jobs for other nations to the detriment of her unemployed which has risen to over 32%. No nation approves of the kind of practices obtainable in the petroleum industry in Nigeria. This is totally absurd and unacceptable.
If an individual called Dangote could build a refinery with a processing capacity of 540,000 barrels per day within three years, a serious people-oriented government will do more and better. The government which failed to build one refinery in over twenty years is now a minority shareholder in a private owned Dangote refinery. What a nation? Before Muhammadu Buhari became president, he was among those who spoke against and resisted the removal of fuel subsidy. He branded it a scam.
After seven out of eight years of this administration, the president who doubles as the Minister of Petroleum Resources has failed to find correct answers to the problem. He has failed to build refineries which he recommended as solution to fuel scarcity when he was asking for votes. He did not only increase the fuel cost but removed subsidy on three occasions. Recently, it took the pressure of Nigerians and a date for protest released by Organised Labour and Civil Society Organisations against total subsidy removal which would have pushed a liter of Premium Motor Spirit to over N 300 for government to back down and postpone the evil day.
The methanol contaminated PMS shipped from Belgium is the latest abuse of the collective Psyche and intelligence of Nigerians. The incident is nothing short of general inefficiency in government. This trouble would have been averted if the local refining capacity is even up to 50%. Nigerians were surprised that the contaminated fuel was duly certified only for motorists to find out at the retail end. The Nigerian National Petroleum Company Limited (NNPCL) has quality control or assurance department which tested and certified the contaminated fuel to be good.
However, nobody has been held responsible for dereliction of duty and for the pains caused Nigerians. In other climes where integrity is a virtue and human being regarded, people will voluntarily resign. But not in Nigeria! Those in positions of authority will shamelessly rationalise their ineptitude and confidently stay put. This is an unfortunate case of an oil producing nation without a functional refinery.
Sunday Onyemaechi Eze, a Media and Development Communication Specialist writes via firstname.lastname@example.org and can be reached on 08060901201