By Stephen Ubanna
Ahead of the February 18, 2023, general elections, President Muhammadu Buhari, a retired Army General, appears determined to fix the country’s ailing refineries. Last April, the Federal Executive Council, FEC, had approved $1.5 billion for the rehabilitation of the 150,000 b/d, PortHarcourt Refinery ,PHRC which has been working in bits and fits over the years.
With the approval of the $1.5 billion contract sum, for the refinery the Nigerian National Petroleum Corporation, NNPC, was emboldened to sign the Contract for the rehabilitation of the refinery with SPA Tecnimont, an Engineering firm from of Italy. Already the Company Engineers have arrive on site to start work in earnest with the hope delivering on the project in the 44 months as contained in the Agreement.
Barely four months after the FEC, approved the $1.5 billion to be used to fix the PHRC, on Wednesday, august 4, 2021, at the usual FEC, meeting, presided over by the Katsina state born Nigerian President, the Council had approved another $1.4 billion for the rehabilitation of the Warri and Kaduna refineries , in Delta and Kaduna states respectively.
The FEC, according to Sylva Temipre, a former governor of Bayelsa state and now minister of Petroleum Resources. The Council also approved the sum of $2.76 billion acquisition of 20% stake by NNPC in the 650,000b/d,Dangote Petroleum and Petrochemical Refinery , expected to be completed with the sum of about $15billion.
Many believe that the Completion of the rehabilitation of the country’s three ailing refineries and that of the Dangote , will save the country’s scarce Forex from being spent on importation of Premium Motor Spirit, popular , Petrol and Automotive Gas Oil, AGO or Diesel, into the country. Mele Kyari, the Managing Director of NNPC, who could not hide his feelings had told those that cares to listen that ‘’the rehabilitation of the country’s existing refineries, which had often broken down and the acquisition of 20% stake in the Dangote multi-billion dollar refinery project and which hen Completed to start production ‘’transform the country into a hub of Petroleum Products and supply, in the West African subregion by taking advantage of the, African Continental Free Trade Area, AFCTA, to do so and other parts of the world.
Kyari, who could not hide his feelings had said that ‘’ it is going to change the dynamics of petroleum products supply globally in the sense that the flow which is coming from Europe at present will be reversersed to some other direction, including Nigeria.
The Nigeria government has every reason to facilitate the Completion of the PHRC, Warri, Kaduna and the Dangote Refineries, because of the huge loss suffered by the refineries over the last couple of year. Take for instance between February , 2020 and February 2021, the Kyari led Corporation had confirmed that the Refineries N104.3 billion as much of the 445,000 b/d, meant for the local refineries have be taken to the offshore refineries for refining and repurchased by NNPC from the foreign refineries at exorbitant price in addition to the cost of freighting it into the country, thus forcing the price of Petroleum Products to go up in the country despite spending N6.88 billion as operating cost to bring the refineries back to life.
Many believe that the Buhari Administration has taken the rehabilitation of the country’s three existing refineries which had been out of production because of the pressure from the Leadership f the Retail Marketers Association of Nigeria. The Association had repeated told the Nigerian President at different times that ‘’it was high time the country which is an oil producing nation a member of the Organisaton of Petroleum Exporting Countries, OPEC, start refining its own daily Crude allocation instead of taking to offshore refineries to refine and then resort to importation.
Temipre, the minister of state, Petroleum Resource may have given an insight why the government has taken it serious the Rehabilitation the broken down Refineries in order to get buyers for it at good price for it. ‘’The government does not subscribe to the idea of selling off the refineries in the present condition as such action would be politicized by Nigerians’’.
. He had said that that the government was not repairing the refineries to manage it because of past experience of mismanagement which was still hunting it. Hear him: the government is not the best manager of refineries ‘’. It is not surprising why he had said that the government would do everything possible to bring the refineries back to life before the government would decide whether to privatize it or sell all the refineries to private operators. For now, he said the government is looking out for Professional managers to take over control and management of the refineries from NNPC and run it as a business venture as obtained in other parts of the world where there functional refineries in order to make profit and not become a drain pipe.