The Minister of Science and Technology, Dr. Ogbonnaya Onu, recently told a stakeholders meeting of the All Progressives Congress (APC) in Ebonyi State that the Federal Government would ban the importation of petroleum products into the country from next year. This is easier said than done.
The expectation is that the country would have by that time attained self-sufficiency in refining of petroleum products, and would have no need to continue to import the vital products.
Daily national average consumption of three of the most commonly used petroleum products in the country- petrol, kerosene and diesel- totals 53 million litres. The country consumes 35 million litres of petrol, ten million litres of diesel and eight million litres of kerosene a day. We currently import more than 80 per cent of these products at a cost of over three trillion naira annually, which is close to a half of the national budget. The last time the country came close to meeting the local demand for petroleum products was probably in the 1970s and up to the early 1980s, when the refineries were working at near full capacity and the country could afford to export some of the refined products.
The story is much different today with the country importing sometimes close to 100 per cent of its needed refined petroleum products. The refineries have been largely comatose and abandoned. The necessary Turn-Around Maintenances (TAMs) have either not been properly done or not done at all. When done, they have been mostly avenues for successive regimes to fleece the country.
As a result, huge sums of money were expended on the importation of petroleum products. This is money that would have been better applied to the development of critical infrastructure. This situation, in many respects, is a multiple jeopardy for the country: a substantial percentage of national earnings is lost importing petroleum products that could have been refined in the country. In the process, jobs which we desperately need in Nigeria, are exported and maintained abroad; the opportunities for technology transfer and growth which would have been fostered at home through integrated involvement of homegrown resources in the oil industry is lost.
It is evident, therefore, that it would be a huge national milestone if we can rebuild our local refining capacity. We are, however, skeptical of the 2018 date for an end to oil imports. It appears that most of the present optimism is built on the efforts by a private individual to refine petroleum products locally. The Dangote Refinery presently being constructed at the Lekki-Epe Free Trade Zone has set the first quarter of next year as its proposed take-off date for the commencement of operations. That is very good news, and from available reports, the investor is working very hard to achieve the target.
But, it is not sufficiently confidence-inspiring to build the hope of the whole country on an issue as important and sensitive as oil on the initiative of a singular individual, and a single project. Other private investors have to come in, and government must be seen to be playing its part in providing the enabling environment. It is on these two fronts we have our fears.
The Petroleum Industry Bill (PIB), long touted as the comprehensive and updated governance framework for a modern and optimally-delivering oil industry, is still waiting to get the necessary legislative attention more than five years after it was first proposed. Even now, there does not seem to be a headway or consensus yet on the way forward. Government, too, is yet to firmly determine what to do with our four ailing refineries. Are they to be sold outright? Or, given out under a concession arrangement? Or retained under the present government ownership and resuscitated through Turn-Around Maintenance?
Even government’s plan to allow clusters of refineries to develop around the existing four refineries is yet to fully get off the ground. What this means is that government’s strategy to deliver a seamless oil industry with adequate local refining capacity is at best confused and would take more than wishful thinking or political rhetoric to deliver. We call on the President Muhammadu Buhari government to wake up from its seeming slumber on this very vital economic challenge and find a way to deliver the much needed refining capacity before the expiration of its term. We should have attained sufficiency in the refining of our petroleum products by now. Successive governments, especially since the return to democracy, have failed the nation on this vital score. It is a shame that we have been importing a product that we are so blessed with and for so long. This has been at stupendous costs to the nation.
Once the country can attain sufficiency in refining of petroleum products, many of the country’s current economic problems would be solved. The huge funds and resources currently committed to importing the products would be saved and channelled to other areas. The potential for oil exports is huge. If we enhance our refining capacity, the country can earn substantial foreign exchange to fight the present economic challenges and ensure wholesome development and prosperity for Nigerians.