• Thursday, February 22, 2024
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BusinessDay

Who is afraid of privatisation of refineries?

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The Federal Government budgeted about N971billion for subsidy on Premium Motor Spirit (PMS) otherwise called petrol in 2013 while over N635billion has been spent on subsidising kerosene for the last three years. This money would have been spent on other areas of the economy if the refineries were working well.

The refineries are capable of producing these products if they are working and the excess can be exported to the benefit of the country.

Nigeria’s four oil refineries are operating at between 20 and 30 percent capacity and so cannot meet the 35 million litres daily demand of the country, hence the unending nag for importation of these products at a very great cost to Nigerians.

The Olusegun Obasanjo administration did privatise the Port Harcourt refineries but the sales was reversed by Umaru Musa Yar’Adua government to the detriment of the nation. This action was as a result of the agitation of the National Union of Natural Gas Workers Union (NUPENG) and Petroleum and Gas Senior Staff Association of Nigeria (PENGSSAN) against the sales.

These unions are the same ones who have refused to see the need for alternative options that would make the refineries work better. They are again at work to truncate renewed efforts by the government to allow those that can handle the assets to take over and turn them into productive businesses.

Their agitations are questionable because they have not proffered better options that would enable the refineries work and contribute to the economic growth of the country, other than asking the government to fix it. It was the same sing song they chorused in 2007 and the sales was reversed. Today, we know better.

One expects the unions to question the federal government on the modalities that would be employed to carry out the exercise, ensure transparency and accountability of the privatisation process.

They should work towards ensuring that the proceeds from the sale are well accounted for and that the sale is not politicised and that the wrong people don’t buy the assets because if the assets fall into the wrong hands, it would amount to a drawback for the industry and the nation whole.

refineriesPrivatising the refineries would attract investments, create job opportunities, enhance efficiency, free the downstream of all sorts of distortions and put an end to payment of subsidies on some petroleum products and corruption in the downstream sector of the oil and gas industry.

Emi Membere-Otaji, the managing director of Elshcon Nigeria Limited, while reacting to this, said that generally, government has no business being in business. This, according to him, is more apt in Nigeria because the outcome is not just inefficiency and non-profitability but actual drain pipes.

He said further, “Our refineries have failed us as a country; but privatisation and following due process, leading to the emergence of the right winner is the way forward.

“President Obasanjo tried to privatise the refineries but union protests led to the reversal of the sales later and instead billions of naira have been pumped into them. What is the result today? The refineries are still not performing and we are still embarrassingly importing refined petroleum products and the billions of naira are being wasted,” he said.

Member-Otaji said the union members should look at the bigger picture and allow the process continue. “Today telecommunications in the country is common place because it’s privately run while the state owned NITEL and MTEL are moribund,” he said.

By: OLUSOLA BELLO