Dear Buhari and Kachikwu, sell our refineries NOW!

Editor’s note: Nigerians consume about 45 million litres of petrol per day. The estimated current output of refineries is 12 million litres daily. According to Ibe Kachikwu, the minister of state for petroleum, $700 million is required for upgrading the national refineries in order to ensure they maximise their output. Nowadays the refineries are working at 60% capacity.

Churchill Okonkwo in this piece highlights how the urgent sales of our refineries can assist in its reincarnation. He adds that Kachikwu and President Buhari should scrap their current attempts to partner with investors in an attempt to refurbish the under-performing refineries.

Sorry Buhari and Kachikwu, What Our Refineries Need Is Euthanasia And Not Revival

By Churchill Okonkwo

A good starting point in this discourse on fuel crisis, our refineries and government’s policy direction is a quick look at our track record as a country in running business enterprise since independence. In summary, it has been terrible. The collapse of NEPA, NITEL, Nigerian Airways, NIPOST, Nigerian Railway, etc. is a clear indication that the obituary announcement of the Nigerian government owned refineries is only being delayed. The fact is that for over 20 years, our refineries, apart from serving as conduits for fraud, have been on life support, and what is urgently needed is an assisted death so that they can reincarnate.

I had earlier stated that one of the “biggest tests” of Buhari’s Presidency, one that will also define the direction the country is headed to in the next four years is what he does with oil subsidy and dilapidated refineries, little did I know that it will take this administration almost one year to make a significant sea-change in the policy direction in the downstream oil sector. Even though this change in policy direction is still amorphous and at conflict with full deregulation, it is still a step in the right direction. So, good job Kachikwu, but one more thing; sell these refineries NOW!

READ ALSO: PH refinery reopens, to produce 5million ltrs of petrol daily

Forget about your rosy picture of exporting fuel “starting from 2019”. John Wooden, the hall of fame college basketball coach from UCLA was asked about achievement, he said, ” don’t let what you cannot do interfere with what you can do”. The Nigerian government filled with parochial interests over sound economic sense is a bureaucratic nightmare riven with waste and fraud and cannot run a business. This administration will therefore be interfering in what it cannot do by reaching back into a time long gone and thinking of solutions that have no place in contemporary era. They should focus on making and enforcing rules to allow businesses to flourish. That’s what the government can do.

A point to make is that the administration of Muhammadu Buhari is “clean” and should revive our decapitated refineries and re-start domestic production of refined petroleum products. The counterpoint is that this is highly unsustainable. It will in the very near future default to inefficient production and a continuation of culture of corruption in this (and/or after) government. The result will remain rotting refineries that are losing Billions of Naira in a market that depends on imported petroleum products. Way to go is to transparently and completely sell all our refineries to corporations that understand (and are serious with) the business of crude oil refining. Not a repeat of the “magomago” in the sale of PHCN to incompetent, unprepared and undercapitalized political cronies that for now have crippled the power sector in Nigeria.

In addition, the crude oil refining license should be liberalized. As Chief Clarence Olafemi rightly said, the Federal government should hands off refineries. Successful removal of subsidy (or whatever they call it) will hopefully remove one of the remaining constrains on investment. But an attempt to “revive” the ailing refineries or continue with “subsidy payment” will be similar to what Albert Einstein called insanity: doing the same thing over and over again and expecting different results.

Kachikwu’s admittance of failure to refine our crude oil (as has been the case for over 20 years now) should be seen as a stepping stone to discoveries and success. Discovery to the fact that the current minister of petroleum who happens to be Mr. president together with his deputy Kachikwu, the MD of NNPC has failed to refine our crude oil (just like others before them). This is also a confirmation that all the redundant big heads at NNPC and DPR are just busy collecting allowances for local and overseas training, retraining, courses, seminars etc. on how to market the Nigerian crude oil, never to refine. Success in what sense? Success to the fact that we can now take our destiny into our hands by ensuring that our refineries are privatized. Success to the fact that we can now badly ask some questions as to why we are still dragging our feet over the privatization of the refineries.

An old Asian proverb states that we learn more with our two ears than with speaking. Let NLC listen and think slowly. I strongly believe that it is not how successful a strike action is that matters, or whether the 50% increase in fuel price is cut by half only to be increased by another 50% that counts. What counts is that any evaluative conceptualization of strike should be geared towards a lasting solution and be all embracing. I also believe that only if we prepare ourselves for the big war against government reluctance to privatize the refineries and rid that sector and all other sectors of the Nigerian society of corruption and corrupt practices that we will be able to really succeed. This is why Nigerians need to think slowly before acting quickly.

Let the next labor strike be for increase in minimum wage (for states that can afford that), the privatization of the refineries and for probe into what happened to the monies that were pumped to that sector. It will be interesting to see if PENGASSAN will join.  Our refineries, as a matter of urgency have to be privatized to provide a competitive platform to imported refined petroleum products. This will equally put to maximum utilization the vast infrastructures in these refineries that are gradually rusting away. Put the redundant “big heads” at the refineries to work or be shown the way out. That is the change Nigerians voted for.

READ ALSO: Kachikwu says Nigeria needs USD700m to upgrade refineries

I have always assumed that my generation will learn from the mistakes of the past. Yet, based on the current government failures, inconsistencies, and labor blind approach on the fuel price issue, if appears that, if anything was taught about experience, little was learned. Instead of agitating for real solution to the perennial fuel crisis, Nigerians wearing the shoes and feeling the pinch are propelled by political innuendo to display sheer ignorance.

It may be hard to white wash this one: learning and changes will (and should) occur at some point, want it or not. What this administration can do and should do is to try new methods for the same mission. So, let Kachikwu and Buhari should jettison current attempts to partner with investors in an attempt to “refurbish our underperforming refineries”. Rather, they should assemble investors that are ready to take the risk of operating in our restive business environment (Dangote is leading the way), prepare a joyful requiem mass and let us slowly put our refineries to rest in the hands of corporations that will revive them and take us out of this darkness. I stand to be corrected.

This opinion first appeared in Sahara Reporters.

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