BY: IFEANYI IZEZE<\/p>\n
The report that Nigeria earned $54.5bn from crude oil and spent $54.6bn
\nto import petroleum products in 2018 should be a saddening narrative to
\nanyone who still has an iota of patriotic attachment to this country.
\nWhen you hear things like this about this country you get vexed in your
\nspirit. How do you explain this?<\/p>\n
Surprisingly, the nation\u2019s apex oil concern, the Nigerian National
\nPetroleum Corporation (NNPC) is yet to wake up its ideas to agree that
\nit has completely lost it not because it has no well-trained and fully
\nqualified professionals who are capable of producing results but because
\nfor whatever reasons, its top managers willingly allowed politicians and
\ninfluence peddlers to completely mess up with the NNPC core mandates.<\/p>\n
Now is more fashionable for even the refineries and PPMC staff to
\nsupport importation of petroleum products than to carry placards in
\nprotest against the sorry state of the nation\u2019s refining plants where
\nthey work. Who do us this?<\/p>\n
Let\u2019s leave the politicians in government out of this, and ask: are
\nthe refineries staffs concerned at all about how the ordinary Nigerians
\nperceive them as they go to work every day to produce nothing and at the
\nend of every month get paid huge sums of monies as salaries for doing
\nnothing? Until we begin to think differently, nothing will ever change
\nin this country.<\/p>\n
As disclosed by the Organization of Petroleum Exporting Countries (OPEC)
\nin its Annual Statistics Bulletin (ASB) 2019, the value of exports of
\ncrude oil by the country in 2018 amounted to $54.513 billion while
\nimport of petroleum products was $54.645 billion. So that means Nigeria
\ndid not gain as such from its entire oil business last year, as its
\nvalue of imports was higher than its value of export.<\/p>\n
Is it not a clear aberration that this country does not refine its crude
\noil, rather spends huge monies on importation of petroleum products for
\nits over 200 million inhabitants? Nigeria spent N2.582 trillion on fuel
\nimportation in nine months, from January to September 2018, rising by
\n12.9 percent from N2.289 trillion recorded in the first three quarters
\nof 2017.<\/p>\n
How much will it take to install new plants at the same site in Port
\nHarcourt, Warri and Kaduna where the NNPC refineries are currently
\nlocated? If we cannot revamp what we have as refineries, why can\u2019t we
\nbuild new ones?<\/p>\n
Data from the National Bureau of Statistics (NBS) Foreign Trade
\nStatistics for the Third Quarter of 2018, has it that Nigeria\u2019s fuel
\nimport stood at N845.12 billion, N720.4 billion for the first and second
\nquarters of 2018 respectively.<\/p>\n
During the crude oil price crash, which started in 2015, the country\u2019s
\nvalue of exports dropped to $41.168 billion, and got worse in 2016 as
\nthe country made a meagre $27.295 billion.<\/p>\n
On the other hand, the country\u2019s value of imports of products in 2014
\nwas $70.778 billion, dropped to $52.525 billion in 2015; $46.552 billion
\nin 2016; $49.508 billion in 2017, and shooting upwards to $56.645
\nbillion in 2018.<\/p>\n
Despite the fire and brimstone spat on revamping the nation\u2019s dead
\nrefining plants by President Mohammadu Buhari when he took over power in
\n2015, it\u2019s yet to be seen what he as the petroleum minister has done
\nto turn around the pathetic state of the refineries. Rather than the
\nfortunes of the refineries taking a turn for good, it has in real terms
\nworsened since he assumed office on May 29, 2015.<\/p>\n
The refineries lost N34.57bn from June to December 2015; N8.64bn in 2016
\n(data for January to August showed); N47.19bn in 2017, and N132.51bn in
\n2018, according to the Nigerian National Petroleum Corporation.<\/p>\n
These are NNPC data: In 2015, Port Harcourt, Kaduna and Warri refineries
\nwere idle for eight months, seven months and nine months, respectively,
\nlosing N10.05bn, N36.03bn and N21.39bn.<\/p>\n
Warri refinery was idle for five months in 2016; KRPC did not refine
\ncrude for six months, and PHRC was only idle in September.<\/p>\n
In 2017, Kaduna, Warri and Port Harcourt refineries were idle for six,
\nfive and two months, respectively, losing N32.61bn, N22.14bn and
\nN11.51bn.<\/p>\n
Kaduna refinery did not process crude oil for 11 months in 2018, while
\nPort Harcourt and Warri were idle for seven and three months
\nrespectively, losing N31bn, N59.96bn and N41.71bn.<\/p>\n
Latest data from the corporation show that, Kaduna and Port Harcourt
\nrefineries remained idle throughout the first quarter of this year and
\nit is even suspected to still be idle till now. How long can we continue
\nlike this as a country?<\/p>\n
We all know that the combined installed capacity of all NNPC-own
\nrefineries amounts to 445,000barrels per stream day but very few of us
\ncan say when, if ever, the refineries produced at optimal capacity of
\neven as low as 30 percent cumulative performance. So it should not be
\nsurprising that the plants are recording huge loses simply because such
\nlow rates tend to result in losses.<\/p>\n
Though NNPC said in its financial and operations report for September
\n2019, that \u201cthe refining companies have reported operating losses for
\nfour of the past 12 months,\u201d we know it was an understatement packaged
\nto deceive both the federal government and the Nigerian public. How can
\nplants that never ran up to 30 percent cumulative capacity utilisation
\nbe talking of losses only for four out of the past 12 months?<\/p>\n
These same sentiments have driven opposition against private-sector
\ninvolvement in modernizing the refineries despite copious evidence that
\nthe many turn-around maintenance efforts in the past did not add much
\nvalue, even if there were resources to do one now, the outcome is not
\ngoing to be very different<\/p>\n
Truth be told, NNPC as currently packaged with its culture of corruption
\nand inefficiency cannot make any improvement on the conditions of the
\nexisting nameplate refineries. The plants should have been sold a long
\ntime ago. They will continue to depreciate and lose value for every day
\nNNPC still keeps them. Money spent on TAMs in the past was a total
\nwaste. Any more TAMs proposed will be throwing good money down the drain
\nor more aptly into the pockets of a few rogues in government and NNPC.<\/p>\n
The only way those refineries can work optimally is to completely stop
\nall forms of fuel import and the attendant subsidy payments. But will
\nthe government do it? The answer is No and reason being the lack of
\npolitical will power to be honest in service of this nation. It may be
\ndifficult for the country to cope for some weeks or maybe months but
\nthat\u2019s the only way to get NNPC to garner enough willpower to be
\nhonest and serious in bringing the three refineries in Port Harcourt,
\nWarri and, Kaduna to work optimally and produce products for our
\ndomestic consumption. As long as the subsidy programme keeps running,
\nnone of the refineries will ever work as the interest groups will ever
\nmake sure they don\u2019t.<\/p>\n
It was in 2016 that I warned in one of my analysis that \u201cWhen 2019
\ncomes, the cost of economic mistakes often made out of sentiments and
\nignorance will stare many Nigerians in the face. Although sentiments
\nalso sometimes rob people of the sense of guilt, many will remember how
\nmuch the country bled during seasons of subsidizing importation of
\npetroleum products to ensure availability and affordability, while the
\nrefineries remained epileptic at best and at worst totally dead. We can
\nbe better than this as a nation of people. God bless Nigeria!<\/p>\n