FG, Politicians Frustrate Oil Sector Growth – Report
The incessant scarcity of Premium Motor Spirit, popularly called petrol, vandalism of pipelines, oil theft and several other menaces in the oil and gas sector are due to the gross mismanagement of the industry by the Federal Government and politicians, the Centre for the Promotion of Private Enterprise (CPPE) has said.
CPPE described the management of the oil sector by politicians as a disaster, stressing that the government should reduce its hold on the industry and privatise some facilities in it, such as the four refineries being run by the Nigerian National Petroleum Company Limited.
“Let’s take the oil and gas sector, for instance, that sector has been a disaster, because it is fully in the hands of government officials and politicians,” the Director, CPPE, Muda Yusuf, told our correspondent, while speaking on the need to fully privatise the oil sector.
“Imagine if operators in that industry were private sector people, paying taxes and doing things efficiently, the sector would not be in the state it is now.
“It would have raked in a lot of investments, bringing in many foreign and domestic investors, more quality jobs would have been created, and our export earnings would have been fantastic. Our investments in gas and others would have gone far.”
Yusuf stressed that because the government was the one that was largely sitting on the affairs of the sector, it had become a platform for patronage, “which is why we are in the crisis that we face today.
It added, “Whereby every now and then we are plunged into widespread scarcity of petroleum products, oil theft, pipeline vandalism, among others.”
The CPPE boss stressed that privatisation might not be good for every sector, but noted that if the government could identify sectors where the private industry players had clear capacity to deliver, then the government had no business being there.
“This is because if they are there, they will not be efficient, there’ll be a lot of corruption, there’ll be no investments and they will mess it up.”
“All these queues we are seeing today, fuel subsidy issues and crises, as well as others, are because the place (oil sector) is in the hands of the public sector.
“The oil sector can work far better than it is currently when managed by the private sector. It will work far better. If those refineries were in private hands, would they be moribund for so many years? This government has been there for eight years, have the refineries worked?” Yusuf queried.
The Federal Government has been spending heavily over the years to rehabilitate Nigeria’s refineries in Port Harcourt, Kaduna and Warri.
In April 2021, for instance, the NNPC officially signed the contract with Tecnimont SPA for the $1.5bn rehabilitation programme of the Port Harcourt Refining Company and had promised that the facility would be completed in 18 months.
Also, in August 2021, the Federal Executive Council approved the sum of $1.48bn for the rehabilitation of both Warri and Kaduna refineries.
The Minister of State for Petroleum Resources, Chief Timipre Sylva, had announced this at the end of one of the weekly Federal Executive Council meetings held in Abuja.
Sylva had explained that the rehabilitation of Warri and Kaduna refineries would be awarded to Messers Saipem SPA and Saipem Contracting Limited at the combined total sum of $1.484bn and would be rehabilitated in three phases of 21, 23 and 33 months.
But the CPPE boss argued that the funds pumped into revamping the refineries would have produced desired results if the facilities were being managed by private sector operators.
“Do you know how much we have pumped into those refineries, in terms of Turn Around Maintenance and things like that? Do you know how much salaries the people who are staff there are drawing from those refineries? We should identify sectors that should be privatised,” he told our correspondent.