As private sector’s Dangote Refinery deserves plaudits for taking over the responsibility of government and now provides petrol for Nigerians, Mele Kyari, Group CEO of Nigerian National Petroleum Company Limited and every worker in the Midstream sub-sector of Nigeria’s oil industry need to justify their pay.
It looks as if the best they can do these days is to deploy costing template on the internet, showing the Naira and the dollar equivalent of how much they bought petrol from Dangote Refinery and how much they intend to sell it in the various regions of the Nigerian market.
Perhaps this is in fulfilment of the only responsibility left to the petroleum bureaucrats as provided by Section 32(d) of the Petroleum Industry Act, which says that the Nigerian Midstream and Downstream Regulatory Authority shall “(set) cost benchmarks for midstream and downstream petroleum operations.”
Every one of them, claiming to be working in any of the idle refineries, should have been asked to go home a long time ago. And maybe those who kept them idle all these while and continued to pay them for work not done should be charged for economic sabotage.
With four refineries, with combined capacity to refine 445,000 barrels of petroleum per day, 21 fuel depots, about 5,120 kilometres of fuel pipeline network spread across Nigeria, what is rumoured to be 5,692 employees and a closely guarded humongous annual salary budget, NNPCL is a confirmed drainpipe.
All the overpaid, but underworked, staff of NNPCL woefully fail to operate the refineries that was put under their care, and for which they receive mouth-watering remunerations, appear to have now found a way to shamelessly wedge themselves between Dangote Refinery and the marketers, thus further elongating and adding more costs to the petroleum products supply chain.
Add to that the risk of introducing its usual lethargy and inability to manage its cashflow and trade debts. NNPCL owes up to $6.8 billion that has caused its foreign suppliers to halt further supplies of product.
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The problem starting from the days of General Sani Abacha, whose heavy-handed battle against agitators for the actualization of the June 12, 1993 presidential mandate of Bashorun MKO Abiola, led to the National Union of Petroleum and Natural Gas Workers (NUPENG) shutting down the refineries and compelled Nigeria to importation of petroleum products as a stopgap.
But once those who carried out the transactions on behalf of government saw the pecuniary advantages to themselves, they simply turned the temporary measure into a permanent default mode and made every excuse to continue with the sleaze.
And not even the strong-willed President Olusegun Obasanjo, who led the first government of this Fourth Republic, was able to reverse the grossly irresponsible act. He “stoically” endured it all until the end of his tenure, because the resilience of the vultures was clearly beyond his capacity to contain.
When he thought he saw a silver bullet in private sector solution to running the refineries, he sold the Port Harcourt and Kaduna refineries. But his successor, President Umaru Musa Yar’Adua, reversed it and returned the refineries to NNPCL.
It must be noted that in other climes, state corporations are run successfully by the public sector. However, in continuation of the strategy to use private sector initiative to help the public sector carry out its mandate to the Nigerian citizens, the Federal Government should consider returning the Port Harcourt and Kaduna refineries to private firms with the requisite managerial, technical and financial capacity.
In Dangote Refinery, the private sector has demonstrated capacity to establish and run refinery. That probably informed the President’s decision to transfer petroleum that should have been refined at NNPCL refineries to local refineries like Dangote and the modular refineries.
And maybe, also, it is time to review Section 53(5) of the Petroleum Industry Act, which provides that, “Shares held by the Government in NNPC Limited are not transferrable, including by way of sale, assignments, mortgage or pledge, unless approved by the Government and endorsed by the National Economic Council, on behalf of the Federation.”
So this conversation should be directed to members of the National Economic Council, that includes Governors of all the 36 states of Nigeria and that of the Central Bank of Nigeria, and the Vice President as its statutory Chairman.
Now that Dangote Refinery has proven that individuals can function in the hitherto opaque terrain of Nigeria’s midstream petroleum sub-sector, there is no reason why, at least, the midstream section of NNPCL should not be listed on the Nigerian Stock Exchange.
