Deregulation draws concerns on state of refineries
By Sulaimon Salau
CONCERNS about the impending deregulation exercise of the Federal Government took another dimension recently as more Nigerians beamed their searchlight on the current state of the nationÕs refineries, seeking greater attention towards their revitalisation.
Stakeholders, who spoke with The Guardian, said governmentÕs move amounts to putting the cart before the horse, stressing that focus should be more on refining locally, rather than promoting importation.
They expressed dismay at the parlous state of the nationÕs refineries, insisting that the facilities remained the only vehicle that Nigeria could wriggle herself out of the perennial fuel crisis.
A senior director in a major oil firm, who spoke with The Guardian on condition of anonymity, said the deregulation policy was a welcome development positioned to aid growth in any developing country, but noted that circumstances that surrounded NigeriaÕs case do not give the citizens and the operators confidence in the government and its policy framework.
He said: ÒAt this juncture, I think I must say without mincing words that our government is not being sincere with us. Yes, deregulation is good, but will the money saved from withdrawal of subsidy translate to better infrastructure for Nigerians? We have had similar cases in the past and monies were no where to be found today.Ó
ÒIf the government is thinking in the right direction, they should be talking about how to revive Nigerian refineries, but nobody is talking about that today. Our refineries are lying fallow and you continue to make Nigerians pay more for importation, that situation does not speak well of any responsible government. We must change our attitude. Our public officials must be made to realise that they are given the mandate to serve us and not their pockets. They should get the refineries on stream, and then see what the market situation will look like,Ó he said.
The Executive Secretary of the Petroleum and Natural Gas Workers Association of Nigeria (PENGASSAN), Alhaji Tokunbo Korodo, said importation of petroleum products is an undeserved exercise embarked upon by the sixth largest fuel producing country in the world.
According to him, the much-envisaged deregulation may not be able to proffer sustainable solution to Nigerian oil problem, but the government should sit back and draw up an all encompassing framework that would promote the industry.
He suggested prompt attention on reactivation of the ailing refineries and encouraged private refineries, which could guarantee abundant fuel supply and equally generate employment, rather than promoting importation.
Concurring with the experts on the poor state of refineries, the Director of Department of Petroleum Resources (DPR), Mr. Billy Agha, had recently noted that Òlocal production of petroleum products has generally continued to fall as the refineries are operating under very low utilisation.Ó He however expressed hope that the Nigerian National Petroleum Corporation (NNPC) would go by its promise to re-stream Warri and Kaduna refineries before December.
Nigeria has the second largest oil reserves in Africa and is the continentÕs primary oil producer. It had an estimated 36.2 billion barrels of proven oil reserves as of January 2009, and consumed approximately 286,000 bbl/d of oil in 2008.
Nigeria has four refineries, (Port Harcourt I and II, Warri and Kaduna) with a combined capacity of around 500,000 bbl/d, yet it imports about 90 per cent of its local consumption, owing to the comatose state of the refineries.
Experts have hinged the problems to corruption, poor maintenance, theft, and the Niger Delta crisis, which has also interrupted the flow of crude into the refineries and forced them to shut down.
