Nigeria and fuel scarcity: Wonder of all ages
The perennial fuel scarcity in Nigeria was once described by a reputable international journal as the wonder of modern times, which indeed is a fair assessment of this situation, based on the fact that Nigeria is the largest producer of crude oil in Africa and one of the top ten in the world. This is a crisis which has kept occurring for close to three decades now without any solution in sight. Nigeria imports petroleum products worth over $10 billion a year through contractors and of recent by the government-owned Nigerian National Petroleum Corporation (NNPC). It is curious that the existing refineries are barely working and new ones have not been built. Successive governments have not been able to solve this seemingly simple problem, such that fuel importation is now the norm, and a permanent feature of fuel supply in Nigeria. It has also become an avenue for making easy money, sleaze and corrupt practices.
There are about 700 refineries in the world. Most non-oil producing countries build refineries to produce petroleum products for local consumption and export the excess. Singapore is a non-oil producing country, but built three refineries which refine 1.3 million barrels of crude oil a day for export. Venezuela, an oil-producing country has 12 refineries which refine 3 million barrels of crude a day. Iran has 14 refineries which process 2 million barrels a day. India has the largest single refinery in the world ( Jamnagar Refinery) which refines 1.24 million barrels a day, and boasts of the oldest functioning refinery in the world
(Digboi refinery) which was built in 1901. Our neighbours, Niger Republic and Chad produce and refine a modest 20,000 barrels each per day from the oil deposits in the Lake Chad basin shared with Nigeria. The four refineries in Nigeria have a combined refining capacity of about 450,000 barrels a day, but barely work above 30 per cent of its capacity, which is about 135,000 barrels a day, less than 10 per cent of Kuwait’s 1.5 million barrels a day of refined products. Most of the refineries mentioned have mixed ownership between government and such reputable companies as SINOPEC, Petro-China, Exxon Mobil, Total, Sumitomo, Marubeni and Petrobras of Brazil.
These companies and others are already active in exploration and other endeavours in the oil and gas industry in Nigeria. Then, why are they not involved in building or managing refineries in the country? This is the $10 billion question that is begging for answers. Nigeria should have at least six other refineries, one in each of the geopolitical zones of the country. These will complement the private refineries which are already in operation and others which will shortly be commissioned. The Indian government model could be a guide where the federated states of India have refineries primarily for the profit and social impact in areas of location. The blame game on corruption, cabal, opposition and sabotage is no longer tenable and not a solution to this problem. What is needed now is action. The existing refineries must be made to work at a minimum capacity of 80 per cent. The business of government in this case is business and if not, what is the business of government? The slogan of creating enabling environment for private enterprises to thrive is a misplaced and misapplied concept, a false doctrine. It has not worked in Nigeria, but rather deepened poverty, despair and made government to shirk its responsibilities towards the people. If a refinery is built by government, it is built and would be there to serve public needs. It is the same with hospitals, mass housing, schools, roads among others.
The refineries in Nigeria are not working because the right managers are not running them or there is no proper supervision. It has nothing to do with inability of government to run enterprises. The present administration appointed Col Hammed Ali to sanitize the Customs Service. A similar arrangement should be made for the refineries. Col Umar Dangiwa would be a good administrator for Kaduna refinery, former Governor Oshiohmole for Warri and former Governor Akpabio for Port Harcourt. There are others with proven capabilities, integrity and track records who can manage government owned enterprises, such as the decrepit refineries and they will be up and running again. Government and private refineries must co-exist to avoid creating a cartel-monopoly and arbitrary pricing of products. Another long-term solution to this problem would be to expand public transportation systems which will reduce the volume of vehicles on the roads, and as such, reduce the consumption of automotive fuel.
The existing railway lines should be rehabilitated and new tracks constructed to link up more cities. Transportation by inland and coastal waterways should also be modernised. It is pertinent to mention other critical areas which are of concern, such as the health sector which is in total disarray. There is barely any reliable and affordable medical facility in the country today. The dependency on foreign hospitals for medical treatment is now the norm for tens of thousands of the few who can afford it. The obvious solution is also to build world class hospitals which could be managed by both Nigerian and foreign doctors. The decadence in the educational sector is very worrisome, especially the potential security threats posed by the over 12 million Nigerian children who are out of school and roaming the streets. Nigeria is a land of plenty and it has no business with lack and poverty. The dreams of the founding fathers of this great nation have not been fulfilled and the present generation of Nigerian leaders is under obligation to hand over a viable nation to the next generation.
Ambassador Rasheed was director of Trade and Investment in Nigeria’s Ministry of Foreign Affairs.