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‘Privatisation, panacea to moribund refineries’

Saheed Ibrahim

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For Nigeria to exit the regime of fuel importation and scarcity, it must privatise the nation’s refineries and standardize the illegal ones, The Hope has learnt.

Findings revealed that Nigeria, a member of the Organisation of Petroleum Exporting Countries (OPEC) is probably the only OPEC member with poor refineries.

While the US has over 120 refineries, non oil producing African countries such as Egypt and South Africa can also boast of 10 and five functional refineries respectively.

It was also gathered that between 2015 and 2020, over N1trillion had been spent on turnarounds maintenance of Nigeria’s refineries without any meaningful results.

In June 2020, a report from The Nigerian National Petroleum Corporation (NNPC) revealed that despite processing no crude oil in the month, Nigeria’s three refineries still cost the country N10.23 billion in expenses.

Speaking with The Hope, the Head of Mining Engineering Department, Federal University of Technology(FUTA), Akure, Prof. Adebayo Babatunde stated that for Nigeria to have  functional refineries,  private investors must be allowed to run the refineries, saying government alone could not run them efficiently due to greed and nepotism.

The don also called for the standardisation of illegal refineries in order for them to function as modular refineries, saying destroying them had done the country no good.

“I think they are operated by some of the youths in the Niger Delta region. Rather than going there and destroying them, what they should do is that these people should be registered and standardise their operations.

“Another thing to make the refineries work is that there must be an enabling environment created for foreign investors to come in,” he said.

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An Economist, Elder Fessy Olabode advised the Federal Government to facilitate establishment of modular refinery and stop wasting fund on the old refineries.

The expert described modular refinery as a simplified refinery which requires less capital investment than traditional full-scale refinery facilities.

He decried that a lot of funds is budgeted yearly for repairs of the old refineries which have not made any impact as he suggested that such money be used for other purposes rather than wasting them on old refineries which have not yielded any positive result.

Olabode disclosed that the federal government, at a time, agreed to establish 18 modular refineries, but unfortunately, the promise turned out to be a political statement which never saw the light of the day.

According to him, government should engage such people and train them to upgrade their illegal refineries because they are those vandalising the pipelines and they know the nitty gritty of refining in a crude way.

These people, Olabode stressed, could be trained and be given what is required to avoid them stealing from what belongs to everybody.

In the vein, Prof. Oyedele Ajaka submitted that unless technicality issues were addressed, Nigeria refineries would always remain unproductive.

He, however, said the distribution network of refined crude oil was also one of the problems, adding that pipelines supplying crude oil to the refineries and those conveying products from them were routinely vandalized and this had led to massive loss of revenue and worsened the problem.

His words,”had it been the depots and the pipelines have been maintained; the capacity of barrels of petroleum distributed would have expanded. But it was left unattended to and now resulted in scarcity and increase in the price of PMS.

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“The country needs an efficient pipeline to function very well. There was a time Nigeria National Petroleum Corporation (NNPC) was building pipelines strategically, but was abandoned and those ones we had before were not properly maintained. Here is the aftermath of the mismanagement,” he stated.

The Ondo Commissioner of Energy, Mines and Mineral Resources, Mr Razaq Obe also said private investors must be involved in the oil industry, adding that if the refineries were working properly, there would not be fuel scarcity and increase in Premium Motor Spirit (PMs).

The University of Liverpool trained oil and gas expert opined that to have functional refineries, government should totally remove fuel subsidy.

While saying total subsidy removal might first be hard on the citizens, he said it remained one of the best ways to resolve oil problems in the country.

Also, a staff of National Oil Spill Detection and Response Agency (NOSDRA), Mrs Fehintola Abraham said the major challenge facing the refineries is poor governance, which had affected the performance of the refineries, saying refineries are owned by the Government without any independent control or access to funds.

She lamented that requests for maintenance funds for the refineries were usually subjected to multilayer bureaucratic processes, saying refineries could not be maintained in such way.

While calling for certain funds set aside for maintenance, Mrs Fehintola highlighted inconsistent government priorities, corruption and weak politics as major challenges militating against functional refineries in Nigeria.

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