LCCI DG blames refineries’ poor performance on policy inconsistencies

Director-General of Lagos Chamber of Commerce and Industry (LCCI), Mr Muda Yusuf, has blamed the poor performance of the nation’s three refineries on inconsistent government policy over the years.

Specifically, he identified inappropriate and unimplemented policies, as well as unfriendly business environment, as part of the reasons the refineries and other sectors of the economy have failed to attract the required investments. He posited that the policies and the environment do not encourage investment.

According to him, “Currently, policies around the refineries are not investment-friendly. With such policies, it would be difficult to attract private sector investments that will help to optimise their output, hence the refineries have been in that situation.”

Speaking at the recently concluded energy conference in Lagos, Yusuf,  said the policies and the environment do not encourage investment.

“Currently, policies around the refineries are not investment-friendly. With such policies, it would be difficult to attract private sector investments that will help to optimise their output, hence the refineries have been in that situation.

“The bureaucracy and political structures that surround the refineries and other projects, had virtually put the government as the omibus of these entities, and for as long as this trend persists, not much progress could be made in the area of optimising the output of these assets.

“It was as a result of this development, that Nigeria, after so many years of oil production, still imports petroleum products with government’s subsidy. It is imperative to reform the sector to attract investors. To unlock and free the sector from the government and make it investor-friendly, reform is important. This will create jobs and other values in the economy,” he said.

He said the Nigerian National Petroleum Corporation (NNPC) is the sole importer of petroleum products because it is not viable for private sector to import, adding that the turnaround maintenance of the refineries has gulped millions of dollars with no appreciable result. “All these steps are not the right way to spend our resources as a country,” he added.

On his part, the immediate past Chairman, Society of Petroleum Engineers (SPE) Nigeria Council, Dr Saka Matemilola, who was also a panelist at the conference said despite the repairs over the years, the refineries refine between four and eight million litres, while national daily consumption of premium motor spirit otherwise called petrol stands at about 41 million litres.

“The foreign exchange implication of importing the product is the reason oil marketers are not importing. Daily fuel consumption of the nation costs about $9 million.

“We will not get it well if we depend on government refineries. The Niger Delta Petroleum Resources Limited (NDPR) operates a marginal field and operates a refinery that produces diesel. When it expands, it can start to produce petrol and other products. The message this firm sends is that successful refining is do-able by Nigerians, but the private sector has to drive it.”