The Group Managing Director (GMD) of the Nigerian National Petroleum Corporation (NNPC), Mr. Mele Kyari, who assumed duties recently, has indicated that he is planning to revive the four moribund refineries in the country before the expiration of President Muhammadu Buhari’s second term in 2023. At the NNPC’s valedictory ceremony for its former GMD, Maikanti Baru, Kyari promised to revive the dead refineries.
The four refineries in the country have a combined capacity of 445,000 barrels per day. They have never really reached the optimal point in spite of the various episodes of turnaround maintenance conducted on them. This is one of the many reasons business development experts often counsel that the government has no business in business. Nigeria consumes no less than 500,000 barrels of crude oil per day and the industrialist, Alhaji Aliko Dangote’s refinery alone, when completed, is projected to produce 650,000 barrels per day.
From experience, the government’s involvement in business in Nigeria has almost always turned awry. There has often been no efficiency in service delivery and no profitability. Many otherwise crucial agencies of the government end up being conduit pipes for slush funds. If the refineries had been owned by private concerns, they would not have ended up being the monumental losses that they have now become, because the investors would not have watched their investments waste away. Truth be told, the NNPC has been involved in the ‘turnaround maintenance’ of these refineries over the years only to cause wastage of public funds. At the same time, it has apparently facilitated the economic advancement of the few technocrats in the system.
Instructively, Dangote’s pipelines are laid in the seabed to prevent them from vandalism. Conversely, up till now, the NNPC maintains the crudest form of fuel distribution in the world. And worse still, it has no plans to improve on its opaque methods. Its pipelines are regularly destroyed by fire and vandals desperate to scoop fuel for survival. Without doubt, the productivity of private companies will outstrip that of the government in this regard. They will be more profitable for their owners and offer permanent reprieve from the painful experience of fuel scarcity. It is indeed difficult to understand why the new helmsman at the NNPC is so interested in ‘reviving’ the moribund refineries. The corporation has been a serial failure in that venture and consistently wasted the country’s resources. Is he also planning to fail?
In any event, the idea of resuscitating these effete refineries is bogus and counterproductive. When the refineries eventually compete with private refineries, they will not be able to break even, let alone serve the purpose initially intended. Already, they are veritable scraps to be dismantled and disposed of. The spaces which they occupy can either be converted to some other uses or sold out to other investors in the industry for private occupation. Nigeria doesn’t need another project that will drain its scarce resources. What it needs desperately are efficient and productive private refineries positioned to exceed the amount of local fuel consumption and subject the pump price of premium motor spirit (PMS) to market forces.
Kyari should perish the thought of reviving the moribund refineries.