Attention: Mrs. Diezani Alison-Madueke and Engr. Andrew Yakubu
5th July 2014
Alongside many other patriotic Nigerians, I am intensely worried that our refineries in Nigeria have virtually become comatose. Looking at the body language of the Ministry of Petroleum Resources and the Nigeria National Petroleum Corporation (NNPC), as the managers of the public arm of Nigeria’s oil and gas industry, one can clearly see that these managers are resolutely intent on the translation of Nigeria’s refineries from public to private ownership. Strong arguments have been advanced that, like in most other things, government has “no business with business”; and as such, the best way forward for our refineries is to privatize them. To be clear, while one may choose to see some substance in this argument, the truth, however, compels us to patriotically disagree and warn that, like in most things in the Nigerian oil and gas industry, there is far much more to this issue than what immediately meets the simple ‘trusting’ eye.
2.The big question is simple: Should Nigerian refineries translate now from public to private ownership? Most true Nigerians will argue that the right principle for determining this question is that of national interest. Whatever is not in the best interest of the nation is a wrong option, no matter what arguments are advanced in the defense of such an indefensible position. True patriots will doubtlessly ask: What is wrong in first optimizing the operational capacity of our refineries before embarking on the journey of privatization? Why must Nigeria hastily embark on the journey of privatization when our refineries are clearly in a horrible state where they can only be ‘leased’ or ‘sold’ as scrap? Who stands to benefit, if and when our refineries get leased or sold as scrap? Of course, not the good ‘trusting’ people of Nigeria who presently own the refineries! Since the privatization of our refineries at this moment is, in truth, not in the best interest of the national economy, the ‘sweet’ arguments advanced in its favour are, at best, nationally repugnant catch-22 propositions.
3.In Nigeria today, the most optimistic estimate available about the level of the functionality of Nigerian refineries places their operation at 30% of installed capacity. All keen watchers of the industry know that this estimate is simply upbeat. Howbeit, for the purpose of not allowing the serious points that must be raised in this piece to be side-tracked with mundane obscurantist arguments about forms rather than substance, let us work with the 30% estimate. To hastily lease-out or outrightly sell-off our refineries before optimally operationalizing them, will be a monumental fraud potent enough to severely damage our national economy. The under-listed points will help bring this argument into sharp focus:
a. The combined installed capacity of Nigerian refineries is 445,000 barrels of oil per day (bopd) which translates to 34-million liters of petrol per day alongside other white products.
b. If the operational capacity of Nigerian refineries is increased by 40% (i.e. from 30% to 70% of installed capacity), they will automatically consume 178,000 bopd more and thereby produce an additional 13.6-million liters of petrol per day.
c. The additional consumption of 178,000 bopd by Nigerian refineries, will add an average of $5.34m per day (i.e. N854.4m per day and N311.856b per annum) to the Nigerian economy as the nation presently loses an average of $30 per barrel to the corruption-infested Crude Oil Swap mechanism by which the oil industry disposes of the allocated crude oil not consumed by the refineries due to low capacity operation. This is definitely not acceptable to the ‘Cartel’ that has been feeding fat on the mechanism to the horrifying detriment of the Nigerian masses.
d. Much more, the production of an additional 13.6-million liters of petrol per day by Nigeria’s Refineries will add an estimated Four Hundred and Fifty Thousand (450,000) more sustainable jobs to the national economy in the succeeding 12-months; a situation that the ‘Cartel’ is not enthusiastic about its realization.
e. Furthermore, the addition of 13.6-million liters of petrol per day into the economy by our refineries will reduce the quantum of fuel importation require by the economy and, thereby, significantly reduce the amount of subsidy claims to which fuel importation merchants (most of which are proxies of the Cartel) may be entitled.
f. The oil and gas sector Cartel running the Crude Oil Swap mechanism, advancing massive youth unemployment in Nigeria and fraudulently feasting on our commonwealth through the evil mechanism of subsidy claims, are actively working against the laudable and patriotic mandates of the Transformation Agenda of H. E. President Goodluck Ebele Jonathan GCFR.
4.Consequent on the foregoing, the evils of the argument of rushing-off to lease-out or sell-off our refineries are now openly laid bare in front of our patriotic eyes. After fraudulently appropriating our commonwealth to themselves, the Cartel is now laboring under their self-induced misdirection to recruit our support for their plan to woo national consciousness and instigate the reckless selling-off of our refineries which they hope to purchase as scrap through their local and/or foreign proxies that will pose as partners. With our own money which they have stolen from us, the Cartel will purchase our refineries from us at rock-bottom prices as scrap. How, in God’s holy name, is this argument tenable? Nigerians are aware that, despite the huge successes recorded in the privatization of our telecoms industry, NITEL, having been deliberately damaged before the takeoff of the privatization programme, has remained non-functional.
5.In the overriding interest of the Nigerian public, therefore, Nigerian Refineries MUST not be sold in their current deplorable state! The refineries must first be operationalized to function at a minimum of 70% of their installed capacity! After the achievement of this optimal operational capacity, the argument should then be advanced as to whether they should be privatized, commercialized or remain in public ownership! For the utmost benefits of Nigerians, these are the demands of #BRING BACK OUR REFINERIES.
Solomon Ben Olonade Esq.
Legal Practitioner & Development Strategist