Adebowale: Why Nigeria’s Refineries Should be Functional
The state of inertia, under which the Nigerian refineries now reel, has always been a source of concern to many economic experts. In this interview the President, Certified Institute of Purchasing and Supply Administrators of Nigeria, Dr. Mufutau Adebowale, suggests the way out. Kayode Fasua presents the excerpts:
The general belief is that our refineries are in bad shape and if repaired, are no longer sustainable. Do you share this view?
That’s a cock and bull story, a big lie. All our refineries are in near perfect condition, if not in perfect order. All that is required is for the career engineers in the NNPC to effect minor repairs and we are good to go. During the tenure of President Jonathan, scarcity of fuel was common because the refineries were kept comatose, making local refining of fuel impossible. As a result, we had to depend on importation, and because the naira was fluctuating against the foreign currencies, particularly dollar, the prices of fuel were not stable. But ‘in order to be helping the masses’, they made the government to be paying a fraction of the cost of the fuel which they described as fuel subsidy. This was indeed a big waste and a channel for the ‘fat rats’ in the NNPC and the Petroleum Ministry to siphon money.
I stood up against this and wrote series of letters to President Jonathan, urging him to pay special attention to the activation of our refineries. The following month, precisely March 2012, the production capacity rose at our refineries by 70 percent. That means the refineries had not damaged as the public was made to know. Same thing happened when Buhari came in.
So, after the refineries came alive, the powerful people, the cabal, ensured deliberate neglect of the refineries and we had to start importing fuel again. Along the line, the government was paying subsidy to oil importers. When our refineries are working, we don’t import and the government does not have any cause to pay for any subsidy.
Recall that the Minister of State for Petroleum, Dr. Ibe Kachikwu, at a time wrote a letter to the President to complain of how some contracts valued at $25bn were allegedly awarded by the NNPC Group Managing Director, without recourse to him. Do you see the cabal at work here?
Well, the Minister of State, Kachikwu, is even lucky that his letter was leaked and exposed. That means it had been read and assimilated. What about me? I have written series of letters to President Muhammadu Buhari through those who are close to him, on how to make our refineries work, but I have not got any acknowledgement till date.
When Buhari was still President-elect in 2015 and there was serious fuel scarcity at the tail end of President Goodluck Jonathan’s administration, I personally sent a letter to Buhari on how he could hit the ground running and what to do to end fuel scarcity. I sent the letter by courier on April 21, 2015, through the Emir of Daura, the monarch of his community. I also wrote another one through the powerful Arewa Consultative Forum. I told him what to do to make the refineries work and truly, 11 days after he assumed office, Port Harcourt refineries and others resumed full operation. Meaning that he got my letter but there was no acknowledgement or ‘thank you.’ I am not happy about that.
Coming back to the issue of NNPC, I will be surprised if Kachikwu is not frustrated out of the Petroleum Resources Ministry because the corporation he’s battling with has a powerful cabal that dictates the economy of the country. This same cabal has not allowed our refineries to function and is behind the sustained importation of refined fuel.
So if the refineries are in good shape, how can the cabal stand in their way, preventing them from functioning?
Thank you. This is very simple. The method often used by the NNPC cabal in sustaining the wasteful culture of fuel importation is to frustrate our experienced, indigenous engineers out of the refineries. They would simply transfer them to other departments where they will be far removed from the refineries. For those who are stubborn and who want to make noise, they get them retired prematurely. I am saying this with a knowledge of hindsight in the Nigerian oil industry. By the grace of God, to have risen to the position of president in the Certified Institute of Purchasing and Supply Administrators of Nigeria. I definitely have seen a lot; a lot of how the purchase of needful equipment for oil installations had been frustrated through administrative bottlenecks and other devious means.
When the powerful people in the oil industry became jittery that pressure was too much on government to bring the refineries back on stream. They, for instance, advised government during the time of Jonathan to sell off the refineries. Their aim was to buy the refineries and start selling refined oil to the country and still control the importation of oil, depending on their assessment of the global market. Immediately I got wind of this, I did a letter to Jonathan and told him not to sell the refineries but use our local engineers and technicians to handle the refineries. The President then acted according to my advice and five weeks after, we achieved 60 percent capacity utilisation at the refineries. This was commendable on the part of former President Jonathan.
And what is the way forward?
The solution is not far-fetched. Government should call back the redeployed or sacked good engineers and technicians formerly at the refineries. They should let the old engineers having peculiar experience of our refineries be allowed to work there. This will ensure constant production of fuel locally. When fuel is produced locally in Nigeria, its price at the consumer level could be as low as N30 per litre for petrol. Again, there will be no need to pay any subsidy on fuel at all. Besides, foreign reserves will not be expended on importation of fuel. Why importing fuel and spending our foreign reserves, thereby causing more problems for the government?
It is important to understand that presidents come and go. But the career officers in the oil industry remain. And they give advice to successive administration. We had Olusegun Obasanjo, Umaru Yar’Adua, Jonathan and now, we have Buhari; and people are fond of directing blames at the previous presidents without looking at the direction of the powerful career officers in the oil industry who are behind all the problems. It is time to take the bull by the horn.