Unwholesome controversies over Port Harcourt Refinery

The conflicting information and subsequent confusion over the status of the Port Harcourt Refinery portend no good omen for Nigeria or her yearning for foreign investment. Neither does it buoy the hope of Nigerians for a more stable and more affordable petroleum fuel regime.  The Federal Government should intensify efforts to make the Nigerian National Petroleum Company Limited (NNPCL) a more respectable and accountable organisation.

On November 26, 2024, Nigerians celebrated with pomp the news that 200 trucks had begun lifting refined petrol at the Port Harcourt Refinery, but that excitement was cut short due to a mishmash of communication emanating from the Nigerian National Petroleum Company Limited (NNPCL) and other stakeholders.

The confusion is yet to abate. This is most unfortunate for managers of Nigeria’s oil sector and hapless Nigerians, the victims; given, as it seems, that the supposed cheery news may be no more than yet another official propaganda to hoodwink Nigerians and to fraudulently portray the government as solving Nigeria’s endemic problems.

Barely 24 hours after the cheering news, Nigerians were to learn that what was announced as the commencement of refining of petrol in Port Harcourt on November 26 was more of a publicity stunt. Reports had it that products loaded on that day were “dead stock’, referring to products that had been stored for years; and that whatever was said to be refined was “off-spec”, that needed further purification to attain standard.

The Port Harcourt Refinery had not operated at any reasonable capacity for more than 20 years. After being derelict since 2015/2016, it was shut down in March 2019, to allow for the first phase of repairs when the government hired Italian company, Maire Technimont, along with an appointed technical adviser, to do a review of the refinery complex. In 2021, the Federal Government announced a $1.5 billion funding for the revamp and the NNPCL equally announced the commencement of the project.

On December 21, 2023, the government announced that the mechanical aspect of the exercise had been completed, with a flare start-off carried out. Since then, different dates have been announced for the commencement of refining, but the different dates failed to materialise.

In 2019, for instance, Group Chief Executive Officer of NNPCL, Mele Kyari, had assured Nigerians that the four refineries in Warri, Kaduna and Port Harcourt would resume refining crude oil before the end of President Tinubu’s administration. In July 2023, Kyari said the Port Harcourt refineries (old and new) would come alive in early August. It turned out that the NNPCL was unable to meet its deadlines seven times and concerned Nigerians had stopped taking the company seriously.

For a project of that magnitude and sensitivity as well as its projected impact on the economy, the NNPCL needed to finetune its activities and communication processes to ensure that Nigerians are carried along, particularly the media, to clear the many doubts that have characterized its activities, particularly under its present leadership. Kyari had told the Senate in July 2024 that by the end of the year, Nigeria would become a net exporter of petroleum products. There are yet no signs that this will happen.

The NNPCL was to react a few days back, only after stories went to town that it was not refining but mixing different petroleum products, otherwise known as blending. NNPCL did admit that it incorporated crack C5, a blending component from its sister company, Indorama Petrochemicals, to produce gasoline. It explained that blending is a standard practice in refineries globally.

If blending is standard practice, NNPCL didn’t need to be spied on before it went to town with rebuttals. Checks have revealed that while blending could be a standard practice, it could also be a bypass to avoid full refining and associated costs. It is a cost-saving measure in the case of the non-availability of crude oil as well as a device to beat deadlines. The optics in Port Harcourt betrayed a desperate attempt to hoodwink and impress. Propaganda is not what Nigerians need now.

Nigerians think NNPCL had taken them for a ride, claiming many things that turn out not to be true. Sources around the Port Harcourt Refinery revealed it had not commenced full production but was doing more of a test run, citing the low level of activities and manual operations that took hours to fill up a truck, compared to the ease of full automation.

The NNPCL needn’t arrive at the awkward position that compelled it to join issues with host communities. Kyari and his team needed to be doubly sure of the state of the refinery before rushing to town. Nigerians are concerned that there was no transparency in the communication between the NNPCL and the Nigerian people.

Indeed, revamping the four government-owned refineries should be a priority, to harness the opportunities in local refining. The advantages of local refining for an oil-producing economy are massive; including value addition, job creation, export of refined products and energy security. In the long run, Nigeria will gain more if local refineries are doing well.

We call on President Bola Tinubu to look at the opportunities and savings in forex for the country. He should deal with the cabal in the industry that constrains smooth relationship between local refiners and oil sector regulators. The country needs to create an enabling environment for healthy competition among refiners and also ensure that consumers are protected.

Notably, the President has asked NNPCL to expedite the scheduled reactivation of the second Port Harcourt Refinery and those of Warri and Kaduna. That request should not end up as rhetoric, knowing how long it took for the Port Harcourt old refinery to be revived.

The pump price of petrol at over N1,000 is unaffordable to millions of Nigerians and that’s not acceptable. Government should aim at greater refining capacity at home, which sooner than later, may force a drop in pump price and save forex expended on imports.

Above all, Mr. President should stamp out corruption in the oil sector and allow it to work. It is high time President Tinubu removed people with interests from NNPCL and made it a truly independent, profit-making and people-centred institution.