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Wednesday, April 27, 2016

Getting Nigeria’s Refineries Back on Track





If there is such a thing as a music album on Nigeria’s economic woes, then the perpetual sing-along song of the nation’s moribund refineries should be on it. Not many depressing reproductions of the tale of national failures are told without saying something about it. It is recognized as a challenge that needs to be overcome; but there has been a lot of talk about resurrecting the refineries over the years, all to little or no effect on the ground. Until recently.

Nigeria’s minister of state for petroleum resources, Dr. Ibe Kachikwu has announced that the Port Harcourt Refining Company (PHRC) and the Warri Refining and Petrochemical Company (WRPC) now produce a combined volume of seven million litres of petrol daily. The PHRC produces 5 million litres of Premium Motor Spirit (PMS, or petrol) daily while the WRPC puts out 2 million litres of the product per day. According to Dr. Kachikwu, the Kaduna Refinery “will soon be back in production.” The possible benefits of this reported revival include the slashing of the actual price of petroleum products, as the cost of refining crude oil abroad is factored out. Incidents of petroleum product scarcity should become more infrequent as the supply and distribution of these products across the country become more efficient. Nigeria should be able to save itself the stress of exporting crude oil for processing abroad. It should save a lot of money too.

The seeming reluctance of various administrations to fix the refineries has befuddled the average Nigerian. There have been battles fought over the small matter of whether refineries should be privatized or left in the hands of the government. The argument in favour of the former position rests on the manifestation of textbook government inefficiency in the running of its patch of the oil industry. Private sector involvement has been touted as crucial to the restoration and proper functioning of the refineries. However, the mood of the government at the moment leans towards keeping them close to its chest.

The former minister for petroleum resources, Diezani Allison-Madueke had said that the turn-around maintenance of the refineries was delayed due to the level of decay at the plants, but that a timetable had been drawn up for the repairs to be completed to raise the production capacities of the refineries to an average of 90 percent. Before the present attempts to restore the refineries, the turnaround maintenance had not been carried out on the refineries since 1992. Fortunately, our refineries do not have to remain monuments that remind us of our government’s apparent lack of political will to deal with pressing economic issues.
 
Although something is finally being done about the four refineries, there is still a danger that these efforts may be rendered less valuable by Nigeria’s perennial bug- a poor maintenance culture. Unless this age-old demon is banished to the farthest reaches of our socio-economic realm, we may come back to wailing to the tune of the decrepit refinery song.

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