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NNPC: Buhari’s Men And Ignorance Of The Downstream

Nigeria’s 2018 economic outlook challenging —IMF
By Editor

By Ifeanyi Izeze…

Ordinarily it would have been better to ignore the statement credited to a group that called itself the Buhari Media Organisation (BMO), a metamorph of the 2015 Buhari Media Support Group (BMSG) but for the expressed ignorance of the Buhari Administration masquerading as BMO.

How else can anybody describe the group’s criticism of the proposal to privatize aspects of the nation’s moribund and nameplate refineries if not to say it was an outright display of poor knowledge about modern economic management particularly the downstream oil business?

Curiously, a government that is completely bereft of ideas on how to turn around the pathetic economic situation this nation has been made to go through because it was blindly manipulated for a “change” that has turned out to be for the worse, has opted to recruit all sorts of charlatans to throw darts at anyone that dare come up with ideas to solve the nation’s current economic woes?

Without doubt, tying the proposal by the former vice president, Atiku Abubakar on the need to liberalise some aspects of the downstream operations of the NNPC to ‘amplifying the long condemned IMF recommendation’ smacks of illiteracy and a poor attempt to hoodwink Nigerians about the shadiness in the operations of the NNPC.
What this administration has done by its criticism of Atiku’s proposal is to further expose its lack of knowledge in the ways modern economies are run. The trend the world over is for countries to liberalize the downstream sub-sector of the oil sector to improve efficiency and ensure product availability at all times.

As it is today, the NNPC is unprofitable, unwieldy and not accountable. Compared to its contemporaries like Petronas of Malaysia and Petrobras of Brazil which have since liberalized and modernized its operations, the NNPC still riddles in inefficiency and obvious lack of capacity.

If BMSG believed that it is “rather simplistic for any presidential contender with avowed love of the mass of the Nigerian people to join the advocacy for the sell-off of our national assets, especially the ones that most impact the standard of living of the huge population of Nigeria’s poor and struggling middle class,” they should be told in a plain language that it is even more naive that the nation’s three and half refineries which worked at over 55 percent installed capacity especially Port Harcourt and Warri uptil 2015, now operate at less than 20 percent capacity utilisation.

Ofcourse BMSG as their principal is “not aware” that petrol sold for N97 per litre when this government took over power and in just few weeks, Buhari jacked it up to N145 per litre as the official price. As we talk now, there are several sections of this country in the north, south, east, and West that pay between N200- N300 per litre of petrol. So where is the social pricing?

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What is the selling price of Kerosene across the country? In the mind of the Buhari-led government, the official price of kerosene still remains N50 per litre. As usual the president and his NNPC are not aware that kerosene sells for between N300- N450 per litre in most parts of the country including parts of Port Harcourt with one and half refineries.

As said in their statement, “Our position is that any private entity that desires to own and operate companies in the oil and gas sector, especially in the refinery subsector, should go ahead and secure license and establish their own refineries. Businessman, Alhaji Aliko Dangote has shown example in this regard with his 650 thousand barrels a day refinery in Lekki, Lagos State.”

This funny group probably is also not aware, like their principal that there are over 20 licences for full-stream refineries and about 23 licences for modular plants already awarded to private entities but the Buhari’s economic policies rather than support these private individuals or at least create enabling fiscal environment and support would rather give the nation’s scarce forex to hajj operators and parallel market outfits owned by people from a section of the country.

How can anybody who has an idea of the paucity of investments in Nigeria’s upstream and downstream oil and gas sector say “We are already experiencing a revival in the oil and gas sector and the refineries are recording increased refining capacity under the disciplined superintendent of the President Muhammadu Buhari’s administration?”
Question: the nation’s refineries as claimed by BMO are recording increased refining capacity and we are depending 100 percent on imported fuel with the NNPC petrol imports jumping from less than 30 million litres a day in 2015 to over 60 million litres in the first quarter of this year? What are the refineries: Port Harcourt, Warri, and Kaduna, contributing on daily basis to our domestic market?

Is it not clear that the only improvement in our oil operation since this government came into office, is in the domestication of corruption and stealing especially in mega-billion secret oil contracts, fuel imports subsidy payments, petroleum equalisation payments, and crude-for product swap arrangement under the current administrators of the nation’s apex oil concern.

For an administration that campaigned heavily about jettisoning subsidy regime and ‘stabilizing global oil prices’ coming out to criticize a workable idea to liberalize the country’s downstream oil and gas subsector is unfortunate to say the least.
The contradiction inherent in the position of President Buhari on subsidy is evident for Nigerians to see. After saying there was no subsidy, to making Nigerians buy fuel at the highest price in the history of this country without palliative or cushioning effects to Nigerians and now paying over 1 trillion naira on subsidy. This same contradiction attendant upon by shallow understanding of economics is what leaves Nigeria with a jumbled compassless economy devoid of defined ideology. The world has moved beyond indecision.

Today, this administration pays over N1.4 Trillion annually on subsidy on fuel consumption in Nigeria, a staggering 386% when compared to the figure of N774 million daily as at March this year. Till this day, ordinary Nigerians have no idea how much revenue the NNPC makes in crude sales and the NNPC continues to drench in corruption without transparency and accountability thanks to the cabal at the Presidency some of who commanding members of the NNPC Board.

Now this is what anyone that loves this country and has the ears of our president should do: please kindly tell President Buhari that if nothing is done to the nation’s existing refineries including option of selling them off between now and next year, when Dangote’s new refinery in Lagos will come onstream, the nation’s refineries would never function even at 5 percent install capacity. Also, by then few people, except Dangote himself will be ready to buy the refineries and the prices they would offer will be laughable because they will buy all the plants as scraps. Mark my word! God bless Nigeria!

 

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