109 mega stations or 109 refineries?

Nigeria Labour Congress (NLC) at the weekend in Lagos organized a stakeholders’ forum on the fuel subsidy crisis and the state of the downstream petroleum industry in general. In a robust discussion led by Professor Agbon Izielen and Mr Sunny Atumah, followed by floor interventions, questions and answers, it was resolved that the petroleum downstream […]

Nigeria Labour Congress (NLC) at the weekend in Lagos organized a stakeholders’ forum on the fuel subsidy crisis and the state of the downstream petroleum industry in general. In a robust discussion led by Professor Agbon Izielen and Mr Sunny Atumah, followed by floor interventions, questions and answers, it was resolved that the petroleum downstream sector is in crisis manifested in a number of ways namely; scandalous and criminal collapse of the four national Refineries (100 per cent of our petroleum products needs come through wholesale corruption ridden products imports with all the attendant pressure on foreign exchange),   corruption ridden import parity-pricing model Import which makes products prices unacceptably prohibitive, Poor infrastructures/ pipelines insecurity, irregular turn around maintenance (TAM), TAMs, pipeline security, non-metering, non-upgrading our old (Brownfield) refineries, inappropriate pricing of refined products, urgent need for building new (Greenfield) refineries and the recent IMF favoured price modulation strategy among others.
In all these discussions, no one suggested that Nigeria lacks retail outlets of ever hoarded products. On the contrary, it is an open knowledge that many filling stations in the country (mostly without products p) are inversely proportional to products availability.
It is therefore surprising that the NNPC chieftains have just announced the plans to build 109 new mega stations in all the country’s senatorial districts. Ironically the NNPC made this disclosure in Kaduna during the flag-off of consultation visit to the Governor of Kaduna State, Nasir El-Rufai, who had not long ago warned that if we don’t call NNPC to order, NNPC will kill Nigeria.  Unlike the previous governments, the point cannot be overstated that Buhari government is committed to the revival of domestic refineries to put an end to the abysmal wholesale importation of products, sector unemployment and underemployment as local refinery workers are idle doing nothing. Indeed Nigeria’s petroleum industry is largely dominated by tankers drivers who carry highly inflammable products from Lagos ports to God-knows-where leading in most cases to products diversions, explosions and mass deaths. NNPC must therefore move with the mood of the nation to urgently make sure the existing refineries come on streams while new refineries must be built instead of pandering to the corruption preference of some senators through senatorial districts mega filling stations in place of functioning national refineries. NNPC must learn from the patriotic pan African investment drive of Aliko Dangote whose greenfield refinery would soon come on stream. At the NLC stakeholders’ forum, every participant agreed that Nigeria should adopt production cost pricing method instead of the current import parity cost pricing to ensure appropriate products pricing. But there cannot be production cost pricing method without first domestic production through revival of the domestic refineries. Nigeria needs 109 refineries NOT 109 retail outlets that are already in abundance for imported products with no local value addition. Nigeria should learn from countries like Algeria, India and South Africa which are promoting beneficiation, industrialization, value addition, decent mass employment through domestic refineries.
The challenges facing the country with regards to availability of petroleum products are at unprecedented heights and continue to constitute a source of hardship to the already over-stretched citizenry. Our refineries must just work. We should stop the current shameless wastage of scarce foreign currency on something which we should produce in the country, thereby generate employment and stop the fraud perpetrated in the name of subsidy. NNPC should champion the campaign for local production not retail of imported products. We must pass the PIB and unbundled the petroleum sector for real development instead of making it an ATM for corrupt politicians and influence peddling in the name of senatorial mega stations. The existing Refineries should be made to stand-alone as entities independent.
The management of each refining company should be autonomous and fully responsible for its success and failure. Above we need more of Dangotes to set up new private refineries with retail outlets for domestic products not imported fuels.