All local refineries must fully participate to save this economy

By Sunny Chuba Nwachukwu, PhD

Sunny Nwachukwu, PhD, a pure and applied chemist with an MBA in management, is an Onitsha based industrialist, a fellow of ICCON, and vice president, finance, Onitsha Chamber of Commerce. He can be reached on  +234 803 318 2105 (text only) or schubltd@yahoo.com

Let it not be misconstrued as it appears that much emphasis particularly centres on the oil sector of Nigeria’s economy. There is a valid point why it is so discussed. The economic history of the nation clearly proves beyond every reasonable doubt that the oil industry significantly dictates the mode, direction and pace of the country’s economic wealth, well-being, growth and development; over the past five decades.

The nation, no doubt, has practically gone through real life (bitter) experiences, with the direct impact of the hydrocarbon business on the economy (favourably or unfavourably), as observed in all these decades, till date. Records are there in the massive wealth created by the activities in the upstream extractive operations and exports of crude oil and gas. The examples and records all have empirical evidence (not fiction, nor mere theoretical claims, but clear hard-facts), about the significant contributions the sector has made and how it has impacted the life of the nation, Nigeria; making it to be globally renowned and acclaimed as an ‘Oil-rich Economy’.

By the early 1990s the refined products’ crisis began to rear its ugly head in the country, in the form of ‘fuel scarcity’; and this was as a result of poorly managed Turn Around Maintenance (TAM) of the existing four government owned refining facilities, with a total of 445,000 barrels of crude oil daily refining capacity, located at Port Harcourt, Warri, and Kaduna.

The downstream operations that ought to have been jealously protected and continually enhanced to retain the tempo of expansion and improvements and catch up with the changing developmental trends in demands for refined products, was rather left, neglected and abandoned, to a hopeless fate. These then gradually collapsed and the facilities rotted away to a bad state of disrepair. These economic sabotage and anti-governmental attitude, the unpatriotic activities for self serving interest took the center stage due to the easy money that oil money had become; and which was flowing in the hands of the privileged few that had direct access or contact with any of the past petroleum ministers (political patronage) for crude allocations, hotly in high demand for exports in the upstream subsector of the industry. The story of how this trend or scheme degenerated and deteriorated to the present sorry state (based on the present flawed policies and unpopular decisions that kept the economy down), is a story for another day.

Now, those excesses and financial recklessness and rascality perpetrated by our economic managers over the years in the oil industry (without a break to put the interest or future of the state’s economy into consideration), has finally landed us to where we are today. Our currency exchange rate, which was N546 to $1,000 in 1980; now is @ N546 to $1). Today, we have slided and gotten to the lowest ebb and the bottom rung of our economic ego as a nation. It now looks like we are in a state of dilemma, finding ourselves in the middle of nowhere, searching for the way forward to economic recovery. That’s if those at the helm of affairs are actually joining the rest of us in the search for a genuine way forward, or they are there still filling their pockets with filthily acquired free oil money.

The situation, however, now calls for sober economic living, just like the biblical prodigal son. We need to retrace our steps from further fumbling around with wrong decisions. On the PMS (petrol) pump pricing, we have seen where and what the situation looks like; after the period of fuel subsidy regime, it landed us in a dire straits  and a gloomy future for the provision and supply of refined products, leaving us with an ailing economy and very slim purse (with respect to our foreign reserves). We should not continue to beat about the bush. Enough is enough!

The solution to our self-inflicted economic challenges has to come from within, now. There should be no room for further gallivanting, nor should we continue to play to the political gallery. We must now hold the bull by the horns (if at all we honestly and sincerely mean well for the state of Nigeria), for the nation to survive and succeed.

Let the following listed privately owned oil refining companies (with a cumulative daily output capacity of 1.09 million barrels), that have full approval from the Nigerian Upstream Regulatory Commission (NURC) and the Nigerian Downstream and Midstream Petroleum Regulatory Authority (NMDPRA), and are readily functional to operate, be aggressively engaged immediately, while the government still waits for further inclusion of the four facilities that are being rehabilitated.

Dangote Petrochemicals Refinery @ Lekki FTZ; with 650,000 bpd capacity;

Amakpe Int’l. Refineries @ Ibeno Eket;

Waltersmith @ Ibigwe;

Gazingstock Petroleum @ Abalagada in Ndokwa East LGA;

Azikel Petroleum @ Obunagha in Yenagoa LGA;

Atlantic Int’l. Refineries @ Okpoama in Brass;

Alliance Energy & Power @ Esit Eket.;

Alexis Refinery @ Aboh in Ndokwa East LGA;

OPAC @ Umuseti in Kwale;

Edo Refinery @ Ikpoba-Okha;

Niger Delta Petroleum Resources (Train 3) @ Ogbele;

Lowrie Refinery @ Is North LGA;

Excel Refinery @ Peretorugbene in Ekeremor LGA;

Conodit Refinery @ Umukwata;

Resources Petroleum & Petrochemical Int’l. Inc. @ Ibeno;

Kingdom Global Trading Petroleum & Gas @ Okwabe in Ughelli South LGA;

Frao Oil @ Here;

NPDC/ND Western OML 34 JV @ OML34 field in Ughelli East;

Gasoline Associates @ Ikpoka;

Etopo Energy Plc @ Burutu;

Ogini Refinery @ Ogini in Kwale;

Duport Midstream @ Egbokor in Orhionmwon LGA;

Clairgold Oil & Gas @ Koko;

We are looking at meeting the daily local demand of PMS within the economy; which the actual (as far as most of us close watchers believe), is about 38.2 million litres of PMS, so we care less about the excess padding, because “we are all Nigerians.” The claims about products smuggling to neighbouring countries should be sorted by those imputing it. Therefore, it doesn’t concern this honest contribution being put across, for the simple reason that Nigeria must survive this mess of an economic overload.

It is better that these private companies (including Dangote that might be starting a little longer by July 2022), benefit from their failure to meet up (having shown overwhelming readiness to refine locally). They are the real entities to be given SUBSIDIES on local refining. “They (the rent seekers) know that we too know.” This wickedness against the state must stop!

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A READER’S RESPONSE:

Good morning old boy. I enjoy reading your articles. First, your CV at the beginning of the article is incomplete without adding LS (Loyal Sigmite). Secondly, the N5000 palliative (in your two articles, Business a.m. December 6-12 and December 13-19), promised to cushion the effect of an increase in the pump price [of PMS], proposed by the federal government, is the most ridiculous thing I have heard since I was born.

Now, to the solutions you proposed. I don’t think they will work without a good structure on ground to regulate the local refineries if empowered. The same sets of cabals will hijack  it and make a mockery of it. I believe past and present governments are aware of your solution, because they said it during their election campaign season. But how come, to implement it when they have entered power, it is not feasible? The main solution I think of is good governance. We need a fearless leader that is ready to step on toes and make things happen, as erroneously envisaged with the emergence of Buhari. Outside this, I don’t see any tangible solution. May God help us to get it right soon.

Thanks.

LS. Francis Chukwumma Omeonu (PhD).

Dr. Omeonu sent this response from Lagos.

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