Improving the performance of oil refineries - The Sun

By The Citizen

To avert the strike threatened by oil workers' unions, the Federal Government has shelved its plan to sell the nation's four refineries. The refineries are the 150,000 barrels per day (bpd) Port Harcourt Refinery; 60,000bpd Port Harcourt Refinery; 110,000bpd Kaduna Refinery and Petrochemical Complex, and the 125,000 bpd Warri Refinery and Petrochemical Complex. All have operated sub-optimally under government ownership for almost 20 years.

Following repeated failures over the past two decades to turn around the fortunes of the refineries, the Petroleum Minister, Mrs. Diezani Alison-Madueke, in November 2013, announced government's intention to commence privatisation of the facilities. But, protests by the National Union of Petroleum and Natural Gas Workers (NUPENG) and the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) forced government to beat a retreat on January 2, renouncing the plan to sell the refineries.

The vacillation on the fate of the refineries has once again brought to the fore a critical weakness in the management of public communication in the country. The announcement of the change of mind by the Presidency in January suggested that the   sale was never really under consideration. This could not have been so as the Minister of Petroleum, Mrs. Diezani Alison-Madueke, not only announced the plan last November, she also mandated the Bureau of Public Enterprises and the Nigerian National Petroleum Corporation (NNPC) to commence the processes that would lead to the privatisation this year.

Beyond that, however, the importance of getting the refineries to work at optimum capacity cannot be over-emphasised.  Sadly, virtually nothing run by government in Nigeria works. That is why the public taps that once provided water for the people have largely dried up with their functions taken over by private boreholes; Nigerian Telecommunications (NITEL) has since died, giving way to private telecommunications companies, while the National Electric Power Authority (NEPA), which metamorphosed into Power Holding Company of Nigeria  (PHCN), has been unbundled, and sold to private concerns. The problem has always been a lack of political will on the part of the government to ensure that the facilities are efficiently run to serve the functions they were set up for.

There is no debating the fact that our refineries are heading the way of NITEL and PHCN. The several Turn Around Maintenance (TAM) processes carried out on the refineries have failed to get them to work at their installed capacities. It is not only necessary to interrogate why this is so, Nigerian oil workers must prepare for the inevitability of privatisation, if we cannot get the refineries to work as expected and refine fuel at their installed capacities. The nation cannot continue to expend billions of dollars on maintenance of the refineries and still rely on imported refined petroleum products to meet local demand, under a subsidy system that is riddled with corruption.

Several factors have been adduced for the poor performance of our refineries over the years. It has been said that the rot in the facilities is fuelled by fat cat public servants, who profit from their ineffectiveness. Some reports also trace the lacklustre performance of the refineries to the failure to properly administer, fund and equip them. Again, unduly hierarchical bureaucratic arrangements and centralization of power and approvals in NNPC affect all activities of the refineries directly or indirectly, in varying degrees of severity. For instance, a situation in which a critical maintenance approval requires as many as 27 signatures can only guarantee failure.

The decision of the government to shelve its plan to privatise the refineries does not, therefore, call for undue celebration. It is likely only a postponement of the inevitable because of political expediency. For as long as the refineries cannot work optimally, the prospect of selling them will remain a sword of Damocles dangling over the nation's oil sector.

We, therefore, strongly appeal to the Federal Government to identify the problems plaguing the refineries and summon the political courage to tackle them, headlong. Resorting to selling the national assets just because we do not want to do what is necessary to ensure their optimal performance will do us no good in the long run. At the same time, maintaining the status quo at the expense of all Nigerians is a shame.

The Federal Government, which gets 52% of national income, should do whatever is necessary to ensure that we refine sufficient fuel to meet national demand. Anything other than this would be an abdication of its responsibility. As we had occasion to say in past editorials, it is inexpedient to sell off all national assets. Even our roads are now being concessioned! Selling off every national asset instead of making efforts to run them effectively is an acceptance of defeat. If we continue on this path, in the next 15 years, all public assets would be in the hands of the few wealthy Nigerians who have the financial muscle to buy them. That would be most unfortunate.