The leadership of this country should be ashamed for the alleged plan by the Nigerian National Petroleum Corporation (NNPC) to refine Nigeria’s crude in Eastern European refineries. Such plan represents a clear indication that both the NNPC and the government have completely ran out of ideas on how to improve not to talk of boosting the nation’s local refining capacity.
More so, revisiting an over 20 year old unviable idea, first contemplated but abandoned by Prof Tam David West as an oil minister, was not only retrogressive, it was clearly sinister. For the government to consider projects that would only favour foreign nations that are not in any way bothered about neither the Nigerian economy nor the welfare of its people was the height of our leaders’ insensitivity to the sufferings of the real Nigerian people.
The proposed plan: The NNPC will carry Nigerian crude oil to refineries in Hungary, Romania and some other Eastern European countries to refine and sell same in the international market with the intent of generating added value to the products and making more money for the Nigerian Government for further offshore investments.
From the proposal, over $3 billion (about N351 billion) would be saved yearly as expenditure on fuel subsidy by refining Nigerian crude oil in Eastern Europe.
The General Manager, NNPC London Office, Uthman Mohammed who made this idea public was fully convinced that “With such offshore refining arrangement, subsidy at home can easily be offset. For instance, today, a litre of petrol in London is one pound, 10 pence, about N270 at current exchange rate, while at home petrol sells for N70 per litre at the pump.
You can imagine how much savings can be made from refining our crude oil in Europe and cushioning the impact of subsidy at home.”
Obviously, the proponents of this initiative have stayed in Europe for too long that they seem to have lost touch with the naked reality on ground in their home country. By the way, petrol sells for N70 per litre only in Abuja and maybe some sections of two or three state capitals. Elsewhere, the price ranges from N80- to even N250 in some northern states and the riverine areas of the Niger Delta where the oil comes from.
The proponents claimed that, “the NNPC was not considering outright purchase of such refineries but it would enter into partnership with their operators such that the final products could stimulate investment in retail outlets in the United Kingdom (UK) and other European countries.
The entire plan looks suspicious, especially as it is coming from the NNPC (London) and the Presidency the two- in-one unit that collaborated in the recent past (and may still be collaborating) to administer oil earnings in manners that could best be described as blurred and at worst obscured. And interestingly, the NNPC which has not being able to successfully execute its ‘one mega filling station per state capital project’ want to invest in retail outlets abroad. This is funny.
Matters arising: How is the NNPC going to get the crude oil that would be taken abroad for refining- stocks allocated for domestic refining or? If the NNPC could not account for crude oil feedstock supplies meant for local refineries (as exposed by the NEITI Audit Report) that are few kilometers from the plants, how is the corporation going to be able to know and account for crude stocks shipped for offshore refining in Eastern Europe?
Does the NNPC (London and Nigeria) have the will power to be honest in ensuring accurate records of shipped feedstock to ensure that the quantity of crude oil sent to these refineries actually translate to expected quantities of refined products? Can Nigerians trust the NNPC and the people in government to repatriate exact earnings from the offshore arrangement? The answer is no!
Is it possible that some privileged groups currently involved in importation of refined petroleum products into the country may be secretly dangling the offshore refining proposal using top NNPC officials as interface? This is another serious aspect of the entire plan because, if it is true, the products would ultimately end up in the Nigerian market and in addition, our money in Petroleum Equalisation Fund would be used to settle all kinds of fictitious claims that may ultimately help them get N 270 per litre of petrol.
Rather than fashion ways of achieving sustainable local refining capacity for domestic and export purposes, the NNPC is more concerned with guaranteeing full production capacity for foreign refineries and adding values to those economies through employment creation for their citizens at the expense of the armies of unemployed young Nigerians. This is a big disappointment and the government should be ashamed for misruling the country.
Nigerian economy needs help in terms of investments in infrastructural development to generate the critically-needed employment for millions of well- trained and qualified young citizens. We need refineries, petrochemical plants and retail outlets built in Nigeria to create jobs for Nigerians.
Anyway, since it has suddenly become more lucrative for the NNPC to refine abroad, the Nigerian people should ask for the immediate sale of all the existing refineries to more serious –minded private business organizations.
The alleged plan was invariably a public acceptance that the NNPC is incapable of managing refineries. All the bravados about bringing back Kaduna, Warrri and Port Harcourt Refineries to sustainable capacity utilization were mere gimmicks to deceive Nigerians and waste more of the nation’s highly needed resources.
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Innocent Olumati Port Harcourt, Nigeria March 25, 2008
The idea of Off shore Refinery by NNPC is a good one and we welcome it as long as the Refineries will process our crude Oil ,sell the refined product in Europe thereby yielding more Dollars or euros than the sell of raw crude. My advice is that some NNPC technical staff should be deployed to jointly work with those people.
In 2002 the Government approved licences for the establishment of 18 private Refineries, Six years have past, how many private refineries are operational? None.
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