By Ifeanyi Izeze

The report that Nigeria earned $54.5bn from crude oil and spent $54.6bn to import petroleum products in 2018 should be a saddening narrative to anyone who still has an iota of patriotic attachment to this country. When you hear things like this about this country you get vexed in your spirit. How do you explain this?

Surprisingly, the nation’s apex oil concern, the Nigerian National Petroleum Corporation (NNPC) is yet to wake up its ideas to agree that it has completely lost it not because it has no well-trained and fully qualified professionals who are capable of producing results but because for whatever reasons, its top managers willingly allowed politicians and influence peddlers to completely mess up with the NNPC core mandates.

Now is more fashionable for even the refineries and PPMC staff to support importation of petroleum products than to carry placards in protest against the sorry state of the nation’s refining plants where they work. Who do us this?

Let’s leave the politicians in government out of this, and ask: are the refineries staffs concerned at all about how the ordinary Nigerians perceive them as they go to work every day to produce nothing and at the end of every month get paid huge sums of monies as salaries for doing nothing? Until we begin to think differently, nothing will ever change in this country.

As disclosed by the Organization of Petroleum Exporting Countries (OPEC) in its Annual Statistics Bulletin (ASB) 2019, the value of exports of crude oil by the country in 2018 amounted to $54.513 billion while import of petroleum products was $54.645 billion. So that means Nigeria did not gain as such from its entire oil business last year, as its value of imports was higher than its value of export.

Is it not a clear aberration that this country does not refine its crude oil, rather spends huge monies on importation of petroleum products for its over 200 million inhabitants? Nigeria spent N2.582 trillion on fuel importation in nine months, from January to September 2018, rising by 12.9 percent from N2.289 trillion recorded in the first three quarters of 2017.

How much will it take to install new plants at the same site in Port Harcourt, Warri and Kaduna where the NNPC refineries are currently located? If we cannot revamp what we have as refineries, why can’t we build new ones?

Data from the National Bureau of Statistics (NBS) Foreign Trade Statistics for the Third Quarter of 2018, has it that Nigeria’s fuel import stood at N845.12 billion, N720.4 billion for the first and second quarters of 2018 respectively.

During the crude oil price crash, which started in 2015, the country’s value of exports dropped to $41.168 billion, and got worse in 2016 as the country made a meagre $27.295 billion.

On the other hand, the country’s value of imports of products in 2014 was $70.778 billion, dropped to $52.525 billion in 2015; $46.552 billion in 2016; $49.508 billion in 2017, and shooting upwards to $56.645 billion in 2018.

Despite the fire and brimstone spat on revamping the nation’s dead refining plants by President Mohammadu Buhari when he took over power in 2015, it’s yet to be seen what he as the petroleum minister has done to turn around the pathetic state of the refineries. Rather than the fortunes of the refineries taking a turn for good, it has in real terms worsened since he assumed office on May 29, 2015.

The refineries lost N34.57bn from June to December 2015; N8.64bn in 2016 (data for January to August showed); N47.19bn in 2017, and N132.51bn in 2018, according to the Nigerian National Petroleum Corporation.

These are NNPC data: In 2015, Port Harcourt, Kaduna and Warri refineries were idle for eight months, seven months and nine months, respectively, losing N10.05bn, N36.03bn and N21.39bn.

Warri refinery was idle for five months in 2016; KRPC did not refine crude for six months, and PHRC was only idle in September.

In 2017, Kaduna, Warri and Port Harcourt refineries were idle for six, five and two months, respectively, losing N32.61bn, N22.14bn and N11.51bn.

Kaduna refinery did not process crude oil for 11 months in 2018, while Port Harcourt and Warri were idle for seven and three months respectively, losing N31bn, N59.96bn and N41.71bn.

Latest data from the corporation show that, Kaduna and Port Harcourt refineries remained idle throughout the first quarter of this year and it is even suspected to still be idle till now. How long can we continue like this as a country?

We all know that the combined installed capacity of all NNPC-own refineries amounts to 445,000barrels per stream day but very few of us can say when, if ever, the refineries produced at optimal capacity of even as low as 30 percent cumulative performance. So it should not be surprising that the plants are recording huge loses simply because such low rates tend to result in losses.

Though NNPC said in its financial and operations report for September 2019, that “the refining companies have reported operating losses for four of the past 12 months,” we know it was an understatement packaged to deceive both the federal government and the Nigerian public. How can plants that never ran up to 30 percent cumulative capacity utilisation be talking of losses only for four out of the past 12 months?

These same sentiments have driven opposition against private-sector involvement in modernizing the refineries despite copious evidence that the many turn-around maintenance efforts in the past did not add much value, even if there were resources to do one now, the outcome is not going to be very different

Truth be told, NNPC as currently packaged with its culture of corruption and inefficiency cannot make any improvement on the conditions of the existing nameplate refineries. The plants should have been sold a long time ago. They will continue to depreciate and lose value for every day NNPC still keeps them. Money spent on TAMs in the past was a total waste. Any more TAMs proposed will be throwing good money down the drain or more aptly into the pockets of a few rogues in government and NNPC.

The only way those refineries can work optimally is to completely stop all forms of fuel import and the attendant subsidy payments. But will the government do it? The answer is No and reason being the lack of political will power to be honest in service of this nation. It may be difficult for the country to cope for some weeks or maybe months but that’s the only way to get NNPC to garner enough willpower to be honest and serious in bringing the three refineries in Port Harcourt, Warri and, Kaduna to work optimally and produce products for our domestic consumption. As long as the subsidy programme keeps running, none of the refineries will ever work as the interest groups will ever make sure they don’t.

It was in 2016 that I warned in one of my analysis that “When 2019 comes, the cost of economic mistakes often made out of sentiments and ignorance will stare many Nigerians in the face. Although sentiments also sometimes rob people of the sense of guilt, many will remember how much the country bled during seasons of subsidizing importation of petroleum products to ensure availability and affordability, while the refineries remained epileptic at best and at worst totally dead. We can be better than this as a nation of people. God bless Nigeria!

(IFEANYI IZEZE writes from Abuja: [email protected]; 234-8033043009)