• Saturday, July 20, 2024
businessday logo

BusinessDay

Jonathan confirms refineries will be fully privatised

businessday-icon
Nigerian refineries will be fully privatised as the country cannot continue to leave them moribund, President Goodluck Jonathan said on Thursday.
He also said the private sector which is already eager to take over will be encouraged to build more refineries in the country.
The president, however, did not state when the privatisation would take place.Jonathan stated this on set an interview with the African Independent Television (AIT) during a current affairs programme, Kaakaki, in Abuja.“We will privatise it completely in a way it would have no effect on Nigerians. So, we cannot continue to have refineries that would not work.“The most important thing is not just to privatise the government-owned refineries but allow the private sector to build their own refineries and that is where we are going.
“Normally, the private sector is better in terms of managing enterprises. The government is an evolution even from the time government manages everything. But now, if you look at it globally, the best practice is for government to create enabling environment for the private sector to drive the economy”, he said.Allaying fears of job losses that supposedly comes with privatisation, the president noted that the refineries will create more jobs for the teeming Nigerian youths, adding that the fear of the unknown makes people resist planned changes. “If the refineries are privatised and the private sector takes over, they are not going to bring people from the moon to work (there), they are still going to employ Nigerians, but there is the fear of the unknown which is normal in human behaviour. That makes people to resist some changes. But for the refineries, we will definitely do that”.
More than two decades after the plan was first mooted, the refineries continue to remain publicly owned and decrepit, barely operating at 20 percent of their capacity.
Mixed reactions had last year greeted the Bureau of Public Enterprises (BPE) disclosure of the privatisation of the nation’s four refineries in Warri, Kaduna and Port Harcourt (I&II) as part of the ongoing oil sector’s reforms with labour threatening industrial action.
President Olusegun Obasanjo had in 2006 approved the sale of the refineries, but his successor, the late President Umaru Yar’Adua, reversed it.
Speaking on the current fuel crisis rocking different parts of the country, Jonathan noted that it was not politically motivated, adding that it was unfortunate that Nigerians now play politics with everything. He said until Nigeria starts refining its own products within the country, it will continue to witness these issues once in a while.
“Until we start refining our crude oil to get our own products here within the country, we cannot get out of some of these. It is even really the policy of government. When you continue to export raw materials, you are actually exporting jobs. We have been working trying to bring back our refineries. Of course, at a time refineries were privatised. I remember when I was vice president both Kaduna and Port Harcourt refineries were privatised, a deposit of about $51 million was even paid by the companies that tried to take over…I think it is an area that we must make a deliberate attempt to see that we encourage the private sector. Luckily, a number of people in the private sector, the likes of Dangote Group, are ready to build their own refineries, not necessarily acquire those of the government.“It is not politically motivated. The way people play politics with everything in Nigeria is quite unfortunate. Pump prices are not constant but are based on changes in the international market.
“When I came as vice president in 2007, the price of crude oil at the international market dropped to about $40, there was a day it dropped to $38 per barrel and we dropped the pump price to N65 per litre. And we had to keep it up to N97 when it went up to about $111 per barrel at the international market. The cushioning gap was because the subsidy became unbearable to government. So we had to push it up to N97 per litre. Now that the international crude oil price has dropped back to about $60 or so, it would not be fair for you to still ask Nigerians to pay N97 except you want to deregulate completely”, he added.