Buhari Won’t Fix Refineries, Passes Buck To Next Administration
The administration of President Muhammadu Buhari will not be able to complete the repairs of the comatose refineries and will be expecting the next government to continue with it.
The Minister of State for Petroleum Resources, Timipre Sylva, said this on Tuesday on NTA’s Good Morning Nigeria programme.
The minister said he was hopeful that the Buhari regime would be able to complete 60 per cent of the repair of the two Port Harcourt refineries before leaving office while the ones at Warri and Kaduna would take much longer.
Sylva said, “We agreed from the very beginning that the completion date will overflow into the next administration but we agreed that there are milestones. We expect that by the end of this year, in Port Harcourt, we expect to achieve at least 60 per cent of the capacity production from Port Harcourt.
“We are hoping that by the end of next year, the rehabilitation will have been completed. Of course, Warri and Kaduna started after Port Harcourt refineries and of course, it is going to progress at a slower pace.
“But I believe that at the end of the year, all the refineries – Port Harcourt, Warri and Kaduna – will be operating at a certain capacity. I cannot tell you what capacity it will be operating by the time we leave but they will all be at least partially functional and we expect that since governance is a continuum, the next government will take up from wherever we stop and get it to the finishing line.”
The minister maintained that subsidy removal was the best way to attract investments into the oil sector and fight petrol theft but said Buhari wanted to protect Nigerians who were already suffering.
Sylva stated, “We are still very much committed to subsidy removal. It is just the timing that we are saying ok. Let us re-jig the timing. If it was six months, let us be given a longer time. Every other aspect of the Petroleum Industry Act is moving on.”
The minister described as unfortunate the N3tn petrol subsidy budget for 2022.
He said the money could have been used to achieve more important things that would have a direct impact on the lives of Nigerians.
“Look at it. N3tn is budgeted. You can imagine if this N3tn was budgeted for something else. Do you know what that means for the country? Who is going to benefit from this?” he asked.
Sylva said in countries like Kuwait and Saudi Arabia, the petrol subsidy had been scrapped.
He argued that even when the refineries are working, they will continue to operate at a loss unless subsidy payment and price regulation stops.
The minister said by the time the Dangote refinery is inaugurated and Nigeria completes the repair of the government-owned refineries, Nigeria should be producing about one million barrels of refined crude oil per day.
He, however, said the Dangote refinery would not crash the price of petrol significantly because it would be selling petrol at the international price.
“Dangote has started his refinery under a subsidy regime. But if you notice, it was carefully planned as an export refinery and that is why it is in a free trade zone. It is by his port because he is not refining to sell at a loss as the other refineries were designed to do.
“He designed his to sell at a profit internationally, mostly. If we are to buy from him, we will also buy at the international market (rate). The only saving that we will make is the cost of freight. So, that is Dangote’s own model. It would not function under a subsidy regime. So, it is agreed that no refinery in the world can survive in a subsidy regime,” Sylva added.
But in its reaction, the Trade Union Congress restated its warning to the Federal Government not to remove fuel subsidy until the commencement of the local refining of crude oil.
On its part, the Independent Petroleum Marketers Association of Nigeria warned that without repairing refineries, fuel price hike was imminent.
Also reacting to the minister’s statement, oil marketers said it was unfortunate that the policies of the government had remained unstable, adding that stakeholders were dismayed by the minister’s comment.