Farewell To Artisanal Refineries And Subsidies

Kunle Somorin ( Leadership Newspaper)
Perhaps the sweetest news yet since President Muhammadu Buhari took over is that two refineries Warri and Port Harcourt – will start refining fuel again from next month. is expected to produce at 80 percent of its installed apacity while Warri will do 50 percent.

This renewed hope will definitely put an end to illegal ‘artisanal’ refining in the Niger Delta and shame the many oil thieves and looters of our commonwealth who superintend the fuel subsidy regime.

These activities aren’t new, but since the end of the militant crisis in 2009, their scale has grown beyond recognition. That year, the UN estimated thieves stole around 150,000 barrels of oil a day.

I was not surprised that in a recent interview Buhari said he doesn’t know what fuel subsidy means. No one should be. Bearing in mind that the gangling federal commissioner for petroleum resources under General Olusegun Obasanjo who supervised the refining capacity of about 450, 000 barrels per day, as far back as 1976, is this same Buhari, his lack of understanding of the subsidy regime is quite understandable.

From 30,000 barrels a day, he upgraded Port Harcourt refinery to refine 100,000 barrels a day and the newer one in Eleme to refine 150,000 barrels per day of Nigerian crude, while Warri and Kaduna refined 100, 000 barrels per day of Nigerian crude daily.

The decimation of the country to an import-dependent fuel consuming nation is nothing but a shame. The country is currently consuming about 40.32 million litres of petrol on a daily basis. It means we can meet our local demand. Deduct import cost, dubious claims of importers and unpredictable exchange rates and it is clear that subsidy is a nebulous word for organised crime in the oil and gas sector.

We know of unmetered exportations at terminals and oil well heads and the humongous corruption in all the parastatals in the sector and how $11.6m unremitted funds are withheld, according to NEITI. Even as displeased as I am with the President’s go-slow style, I think his body language has compelled this miraculous turn-around.

For too long, the apparatchiks have inundated us with why certain things are difficult. Budgetary allocations to the sectors have been shared between NASS committee meant to oversight the sector and captains of the civil bureaucracy. Now Buhari has come and everyone is fidgeting. It one reason I want the man to man the ministry of petroleum after leaving the office 36 years after.

We all now know how the subsidies scammers operate and the role of the “oil cabal” in short-changing the rest of the country through their illicit deals. The cases of the children of PDP bigwigs might be suffering in the courts across the country, but the humiliating $3m deal to remove Femi Otedola name from the list of saboteurs. So, let his disposition to scare thieves be the tool of managing the nation’s economic mainstay.

I say this advisedly because despite the rise in product importation, the country has continued to experience scarcity of petrol, and this anomaly has been attributed to subsidy arrears owed petroleum marketers, poor distribution network by the NNPC.

What the re-opening of these two refineries is capable of doing is to keep our oil pumps working, restore our national pride and safe about N3.88 billion Naira (at N97 naira per litre) daily, which PPMC says Nigerians spend on PMS alone.

The official N97 Naira per litre price is obtainable in rural areas across the country or in black markets where the price of petrol can be as high as N120 per litre and in the period of scarcity that heralded Buhari’s inauguration many in Abuja bought the product for as high as N400 per litre.

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