Editorial
Where Are The Private Refineries?
When former President Olusegun Obasanjo’s administration conceded to the idea of establishing private refineries, the objectives were clear: To complement the capacity of the nation’s ailing refineries in ensuring availability of petroleum products.
By so doing, the government was determined to check the problems associated with petroleum products scarcity. It also planned to provide employment for many Nigerians and boost the nation’s depleted foreign reserve. In addition, the proximity of the refineries was to serve as an added advantage to consumers, especially in a deregulated economy.
Consequently, in 2002, 18 firms got government’s preliminary approval and licences to operate private refineries. They include: Akwa Ibom Refining and Petrochemicals, Badagry Petroleum Refinery, Clean Waters Refinery, Ilaje Refineries and Petrochemicals, Niger Delta Refinery and Petrochemical, NSP Refineries and Oil Services, Ode Aye Refinery and Energy, Sapele Petroleum, Southland Associates, Southwest Refineries and Petrochemicals, Startex Petroleum Refinery, Chasewood Consortium, Tonwei Refinery, Total Support Refineries and Union Atlantic Petroleum.
With the new air of liberalization in the downstream sector of the petroleum industry, Nigerians from all walks of life and members of the organized private sector, as well as state governments and their foreign counterparts indicated interests and got the nod to operate private refineries. Even the federal government was not left behind in this new wind of change as it expressed desire to establish three new refineries, in addition to the four existing ones, to enhance petroleum products supply.
Just recently, the Independent Petroleum Marketers Association of Nigeria (IPMAN) commissioned three Chinese firms to build three refineries in Nigeria with the same objective of shoring up the nation’s petroleum products supply. Justifying members’ conviction, IPMAN’s president, Alhaji Ainu Abdulkadir said the new refineries planned for Port Harcourt, Ore and Lokoja would complement the petroleum demands which have been overstretched by the ever-increasing population.
Indeed, this move by IPMAN and well-meaning Nigerians to own private refineries shows the desperate need to end the perennial scarcity of petroleum product constantly threatening various aspects of their lives.
But unfortunately between 2002 and now the overwhelming publicity accorded the private refineries and the need to boost the nation’s four ailing refineries have not exceeded reflections on the pages of newspapers. At best, some companies claimed to have cleared their sites and ready to mobilize for real construction. The story is same for all the firms parading their approval to operate private refineries.
Rather reasons are adduced why it would be impossible for the refineries to take off. Either the prospective companies are said to lack the fund to prosecute the projects or government is blamed for constituting hurdles hindering the companies from executing the project.
For instance after the initial approval to operate refineries, some firms could not access fund from their foreign sponsors which denied them the opportunity to prosecute the contract. Government officials are also accused of extorting money and making unbearable demands from the firms. The bottom line is that the refineries are denied the opportunity to take off. Added to this are several hiccups to the effective operation of private refineries. Granted that licences were given, lack of basic facilities, including power, constitute enormous bottleneck, just as security challenges in some parts of the country are not encouraging.
Also, some analysts argue against subsidy even as government insists that the nation’s energy policy recognises issues of energy, pricing and financing along the entire oil and gas chain. We regret however that the nation is spending enormous resources importing fuel. A whooping sum of $18.5 billion (N2.35 trillion) was reportedly spent on fuel importation between January 2000 and December 2006.
Just as we consider this outrageous, it is indeed unbearable that some Nigerians and their foreign collaborators are championing the sadistic importation of fuel for their selfish reasons.
In fact it is appalling, as a recent report indicted that some multinational oil firms are threatening to pull out their resources from a financial institution if it went ahead to sponsor private refineries in Nigeria.
Whose interest are these multinationals protecting? Is it the greater number of Nigerians, or their corrupt cronies whose acts of omission or commission over the years restricted Nigeria’s economic potentials to the pages of newspapers?
However, we urge the administration of President Goodluck Jonathan to muster the political will to unravel the mystery behind the rot in the nation’s oil and gas sector. The federal government must track down and prosecute those elements sabotaging our national interest for Nigeria to realise its potentials and move to the next level.
We believe that would be the first step to checking the unending petroleum products scarcity, persistent fuel importation and encouraging prevalence of private refineries.
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