Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, has said that Nigerians should pray that the country’s refineries do not become operational.
During his speech at The Platform’s Independence Anniversary event in Lagos, Oyedele expressed concern that if Nigerian refineries were to produce petroleum, the inefficiencies in their management could lead to the country having the most expensive petrol in the world.
“Nigerians would say if only our refineries were working, then we’ll be fine. Nothing can be farther from the truth than that. In fact, Nigerians should come together and say please make sure that our refineries don’t work. We should sell them.
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“If Nigerian refineries process crude oil unless we deal with our inefficiency, one liter of petrol will be the most expensive in the world. You would have succeeded in replacing the subsidy at the pump with subsidy for the refineries.
“The National Assembly said we have spent over N10 trillion maintaining our refineries even when they have not produced anything,” Oyedele said during the event tagged ‘Africa Rising Continent – Nigeria’s Strategic Role’.
Oyedele’s claim that the Nigerian government may struggle to effectively manage refineries echoes similar concerns voiced by former President Olusegun Obasanjo. In an interview with The Cable, Obasanjo recounted an incident where he attempted to attract Shell investors to invest in the country’s refineries. However, they declined, citing concerns about the pervasive corruption within the refinery sector.
“They (refineries) will not work as long as the government is keeping hold of them. When I was president, I invited Shell to a meeting. I told them I wanted to hand over the refineries for them to help us run. They bluntly told me they would not. I was shocked,” he said.
The clamor for working refineries has been loud recently amid the rising cost of petroleum products, buoyed by the removal of fuel subsidy. This has pushed the inflation rate to 26% as the cost of living soars.
The government is once again making moves to revitalize the refineries in the hope it will cut down high petrol pump prices, which have stirred frequent threats of nationwide strikes from organized labor unions.
Minister of State for Petroleum, Heineken Lokpobiri, said the refineries are expected to be functional by the end of next year. He said that the Port Harcourt refinery will come on board by the end of the year.
The refinery at Port Harcourt is undergoing a $1.5bn upgrade after Tecnimont from Italy secured the contract for revamp in 2021. This upgrade is expected to take up to 44 months to complete.
There has been a high expectation that Dangote Refinery would cut down petrol pump prices when it became operational.
The dilapidated three refineries; Warri, Port Harcourt, and Kaduna, have a combined capacity to process around 4.45 million barrels per day. The government aims to revive them to reduce dependency on petrol importation.
Lokpobiri said the Warri and Kaduna refineries are slated to commence crude processing sometime between the first quarter and the culmination of 2024.
However, some stakeholders disagree with Oyedele, saying that Nigeria needs government-owned refineries.
“The government that wants the refineries to work knows what they are doing. Having our own refineries guarantees energy security and would also create more jobs,” the National Controller, Independent Petroleum Marketers Association of Nigeria, Mike Osatuyi, said.
“You can’t control what you don’t own. So, it is good for us to have our own. The cost of importing petrol is now very high. I think government is moving in the right direction by making the refineries work very soon.”