Oil marketers and industry stakeholders have thrown their weight behind the proposed sale of Nigeria’s refineries under the management of the Nigerian National Petroleum Company Limited, calling for transparency, inclusiveness, and accountability in the process.
They noted that the sale or privatisation of the Port Harcourt, Warri, and Kaduna refineries, which have gulped trillions of naira in rehabilitation and maintenance with little or no result, will finally open the downstream sector to competition, ensure better pricing, and stop what many described as a financial black hole.
Their reactions follow the recent revelation by the NNPC Group Chief Executive Officer, Bayo Ojulari, that rehabilitation works on the 445,000 barrels per day capacity refineries were not yielding the desired results due to how obsolete the facilities have become over the years.
Ojulari, in an interview with Bloomberg on the sidelines of the just concluded 9th OPEC international seminar in Vienna, Austria, admitted that the company is currently reassessing its refineries strategies and aims to finalise the review by year-end.
Ojulari further said NNPC remains uncertain whether the review will result in the sale of the refineries.
“What we are saying is that sale is not out of the question. All the options are on the table, to be frank, but that decision will be based on the outcome of the reviews we’re doing now,” he said in the interview.
The proposal, it was gathered, came on the same day the President of the Dangote Group, Aliko Dangote, suggested that the facilities might never be viable due to mismanagement and may not resume operations.
Industry experts say the plan, if executed transparently, could end years of waste and inefficiency.
The National President of the Petroleum Products Retail Outlets Owners Association of Nigeria, Billy Gillis-Harry, stated that the privatisation of the assets looks to be the only reasonable decision to make, considering its history of inefficiencies.
Gillis-Harris, however, questioned the motives behind the timing of this conversation, saying, “We need to be sure of what is driving this process and understand what is the influence behind it.”
He stated, “Well, if you go back a few months, PETROAN had done a very careful evaluation of the situation, and we had advised that privatisation of the refinery will be the best option. And we still maintain the same mindset.
“So if NNPCL has come around, almost about six months or thereabout to get to the same conclusion. It only tells you that PETROAN does a very well detailed empirical analysis. We do wish them well.”
However, the association warned against turning the refineries’ sale into a political exercise devoid of clarity and stakeholder engagement.
He noted that the petroleum refining space should be opened up to encourage multiple players in the market, arguing that competition, not monopoly, will ultimately drive efficiency and ensure availability of petroleum products.
The PETROAN president also expressed disappointment with the current administration’s lack of follow-through on promised investigations into past refinery rehabilitation projects.
He referenced the now-elapsed 30-day ultimatum issued for revamping the Port-Harcourt refinery, questioning the silence surrounding its outcome.
He asserted, “The administration came in and this is the concern I have about politicising our public enterprises. They came in a zest to even say they want to review, research and probe to know what it was used for.
“We have not even heard any of the result of those investigations and then suddenly, selling the refineries becomes an option on the table. So you can clearly see that it is a situation that we really need to be careful about, because we are talking about our future.”
The PUNCH