An oil-producing nation without a functional refinery

Local refining of petroleum products, especially Premium Motor Spirit (PMS), is one panacea to ending the lingering energy crisis facing Nigeria today. However, the fact that the 11th oil-producing nation in the world cannot refine petroleum products locally is troubling. It is baffling that maintaining even one or four of the existing refineries for over two decades has become problematic or rather a mirage. Since 1999, government has continued to bandy staggering figures it claimed to have ploughed into turn-around maintenance of refineries but there is nothing practically on ground to show. With the perennial fuel scarcity ravaging the country, what stops the nation from building more refineries is even more disturbing. A responsible government ought to have known that the shock waves market forces send into the economy on account of variations in global oil prices is a national economic burden. While countries without a barrel of oil like Singapore have local refining capacities, the deliberate refusal by successive governments to put in place infrastructure that will drive the process points to the level of hypocrisy prevalent among Nigerian leaders.

Genuine efforts aimed at finding lasting solutions to the lingering problem of fuel scarcity were met with stiff resistance from elements benefiting therefrom.  Dr. Ngozi Okonjo- Iweala, Nigeria’s former Minister of Finance in her book “Fighting Corruption Is Dangerous – The Stories Behind The Headlines”, painted a sordid picture of the problems around the reform she spearheaded in the petroleum industry. The book defines the extreme capacity of beneficiaries of the subsidy regime to even kill those seen as constituting a stumbling block.  She said: “Based on the report findings and recommendations, it became clear that the finance ministry could not make payments to the oil marketing companies implicated in the fraudulent N382 billion ($2.5 billion) in transactions. This decision was met with tremendous anger and resistance on the part of the companies whose transactions were implicated. There was also anger and impatience on the part of several companies not implicated because they felt the Presidential Committee’s Investigation and verification had further delayed their payments. The tension was palpable throughout this time, and the head of the Presidential Committee, Aig Imoukhude, came to tell me that he was moving his family to London because he felt that these were dangerous times. The refusal to pay fraudulent marketers – many of whom had powerful connections in government and society – was a difficult and dangerous one, as I soon came to know when my mother was kidnapped, and I was threatened with being maimed to get me to leave office.”

The picture the former minister painted above took place in 2012. Between 2015 and 2021, a new report by the Nigerian Economic Summit Group (NESG) disclosed that subsidy regime which President Muhammadu Buhari on one occasion claimed had ended gulped N 3.64 trillion. The report stated that petrol subsidy grew from N307 billion annually in 2015 to N1.77 trillion in 2021. Nigerians should be informed that government officials from 1999 to date and oil marketers benefiting from subsidy regime are those behind the conspiracy to punish Nigerians and make local refineries non-functional. It is estimated that a refinery costs between $15-19 billion. From the figures above, the stolen money lining private pockets can build at least one additional refinery, if not more. Refining the product locally is one immutable solution government has chosen to deliberately ignore. Local refining will not only drastically reduce the huge sum spent annually to service fraudulent subsidy regime, it will create more jobs in the long run. The right case of building modular refineries has lost steam. The nation and its leaders understood clearly the right approach to stemming the ugly tide but have deliberately refused to apply it.

Parochial interests have overwhelmed the national interest. Since efforts to improve the sector were built around enacting the Petroleum Industry Act, nothing tangible in the interim or on the short and long term was done to contain the shock of fuel scarcity and ameliorate the sufferings of Nigerians. The God-given blessing has turned out huge curse and an albatross of Nigerians. It is unbelievable! I align with the school of thought which believes that building more refineries in 22 years is possible. Those at the corridors of power and their associates are the beneficiaries of the human-made problems they visited upon Nigeria. If an individual called Dangote could build a refinery with a processing capacity of 540,000 barrels per day within three years, a serious people-oriented government will do more and better. The government which failed to build one refinery in over twenty years is now a minority shareholder in a private owned Dangote refinery. What a nation? Before Muhammadu Buhari became president, he was among those who spoke against and resisted the removal of fuel subsidy. He branded it a scam.

After seven out of eight years of this administration, the president who doubles as the Minister of Petroleum Resources has failed to find correct answers to the problem. He has failed to build refineries which he recommended as solution to fuel scarcity when he was asking for votes. He did not only increase the fuel cost but removed subsidy on three occasions. Recently, it took the pressure of Nigerians and a date for protest released by Organised Labour and Civil Society Organisations against total subsidy removal which would have pushed a liter of Premium Motor Spirit to over N300 for government to back down and postpone the evil day.

The methanol contaminated PMS shipped from Belgium is the latest abuse of the collective Psyche and intelligence of Nigerians. The incident is nothing short of general inefficiency in government. In other climes where integrity is a virtue and human being regarded, people would voluntarily resign. But not in Nigeria! Those in positions of authority shamelessly rationalise their ineptitude and confidently stay put. This is an unfortunate case of an oil producing nation without a functional refinery.

Eze, a media and development communication specialist, writes in via [email protected]