Mr. Folorunso Oginni is a former Lagos Zonal Chairman, Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN). He speaks on the worsening fuel scarcity in the country and the need for government to stop importation of refined petroleum products.
As a stakeholder in the sector, what do you think is responsible for the worsening scarcity of Premium Motor Spirit (PMS) commonly known as petrol, even after approval of the payment of N413billion by the Federal Government as outstanding subsidy claims to oil marketers?
Government has refused to do the needful, that is why we are experiencing recurring scarcity of petroleum products in the country.
Go to Saudi Arabia now and you will realise that they are selling petrol at equivalent of N22 per litre, but in Nigeria we buy at N87 and above per litre. Saudi Arabia is able to sell petrol at N22 per litre because it is an oil producing country and they refine their crude oil within their country. They do not take their crude oil outside their shores to refine and import it back as refined products to sell at exorbitant rates to their citizens. Why is our government not doing the same to find a lasting solution to the problem of fuel scarcity in the country?
The Nigerian National Petroleum Corporation (NNPC) said they have pumped about 25million litres of fuel into the system, how come scarcity of fuel is even biting harder?
If that is the case, where is the petrol? Why is the scarcity worsening by the day? These and many more, are the questions Nigerians are asking and government is not being sincere with us. Government should stop dribbling Nigerians and do the right thing.
Crude oil price is declining at the international market, yet Nigerians are buying fuel at a very high price, and government is not being honest with Nigerians about the true position of things. This is what is paining us the most. Government must rise to it responsibility, to tackle the problem of fuel scarcity. As long as government continues to import refined petroleum products, we are bound to experience scarcity of fuel.
But government is also saying that some oil marketers are hoarding the product. Have you taken cognisance of this?
Where is the product they are hoarding? Why didn’t they hoard petrol around May/June this year? How come they are hoarding the product now that it is scarce? It is only when a product is scarce that people can hoard it.
As a stakeholder in the oil and gas sector, can you give us the current statistics of daily fuel consumption in Nigeria?
At present, we have a population of over I60 million and the quantity of fuel we consume on daily basis is about 38.4million litres. And if our four refineries are producing at full installed capacity, they will produce about 18.2million litres of petrol. This implies that even when the plants are producing at optimum capacity, we will still need more products. So, until we stop importation and build more and new plants, we may not make any appreciable improvement.
What is the way forward?
All the four refineries we have now, non is producing at 60 percent installed capacity, yet instead of building new plants government keeps dribbling us, saying that the plants are working. Now, if the plants are working, why are we experiencing persistent scarcity of petrol?
These plants were built since 1979 and they are obsolete. Government should stop importation of products and build new refineries across the country. For instance, let government build at least one plant in each zone in the country. For example, if you do the analysis on the difference between 38.4million litres and 18.2million installed capacity of our refineries, you will see the wide gap, meaning we need new and active refineries to meet our daily consumption need.
In that case, has PENGASSAN as a body advised government on how to tackle the challenge of fuel scarcity in the country?
We have advised government several times and at different occasions, to stop importation of refined products and build new refineries across the country, but they are not yielding. Look at the sad situation we are in now. We even appealed to government to build new refineries, at least one plant each across the six geo-political zones in the country, but they refused, saying Nigerians are not managing government enterprises well.
So, we further advised government to build the plants and give them out to third parties who can manage them profitably. In doing so, government can have agreement with them on how much they will remit to government every year, and within a short period, government will recoup its investment. After which, more revenue will still come in as profits from the refineries.
For example, there are many hotels built in Lagos and given out for other people to manage. This is because the owners of such hotels realised that they do not have the technical-know-how to manage them prudently, so they built, equipped and gave them out for experts to manage.
Our government takes delight in importation of fuel and payment of subsidy. Let the media investigate the reasons behind huge subsidy allocations and issuance of licences for importation of products into the country. It is glaring that if you close subsidy and importation, it simply means you are closing the sources of their income. So, you can see the situation we are in this country. The sad thing is that the import licences are issued to their friends and cronies, who are making a lot of money for themselves, to the detriment of the entire masses of Nigeria. Importation and subsidy allocations have become veritable sources of income for some individuals, while the large percentage of Nigerians suffer in abject poverty and unemployment.
That is why government is not interested in building new refineries to stop importation, and our economy is going backward, instead of moving forward like advanced countries. The reality is that, if you fail to plan, it means, you are already planning to fail. This is our situation in Nigeria today and we can see it playing out not only in oil and gas, but in almost every sector of the economy.
Does it make any economic sense for Nigeria, which is one of the largest crude oil producing countries to import refined petroleum products? We have what it takes to build refineries in Nigeria, but those in authority are not interested due to selfish reasons. That is why we are experiencing recurring scarcity fuel in the country.
Singapore for instance, has no crude oil, but that country has over 30 refineries. They buy crude oil from outside, refine and sell to develop their economy. The problems in Nigeria are not diversion of product and hoarding as government is making Nigerians to believe, but corruption associated with issuing import licences and subsidy. They are putting lies on Nigerians, so that government will put everything at the door step of few individuals to enrich themselves. You can only hoard a product that is scarce.
Can you give us the monetary estimate on how much government needs to build refineries across Nigeria?
Government can build a modern refinery with $4billion. What obtains all over the world now is modern automated refinery and not analogue. If the production capacity can meet our consumption need, why do we deceive ourselves with importation of fuel. When Niger Republic built a refinery and their President was asked what their plans were, since they may not consume everything that will come out of the plant, he said, they will sell to neighbouring countries, including Nigeria.
Can you imagine how our situation has deteriorated so much that, a country like Niger Republic is targeting Nigeria for fuel export? Does what is happening now not speak volumes about the negligence of our government? Look at the power crisis in Nigeria, other countries are generating power with hydro-carbon but in Nigeria, everyone is interested in oil when other resources are neglected.