In a recent development, President Bola Tinubu has expressed his determination to revive the state-owned refineries in Port Harcourt, Warri, and Kaduna, despite former President Olusegun Obasanjo's skepticism. This bold move by Tinubu has sparked an interesting debate, with varying opinions on the viability and future of these refineries.
A Clash of Perspectives
Tinubu's stance contrasts sharply with Obasanjo's long-held belief that the Nigerian National Petroleum Company Limited (NNPCL) is incapable of successfully operating these government-owned refineries. Obasanjo, drawing from his experience as President from 1999 to 2007, argues that public-private partnerships (PPPs) offer a more viable model for managing major government assets. He cites the success of the Nigerian Liquefied Natural Gas (NLNG) project, where the private sector holds a majority stake, as an example of PPP's effectiveness.
However, Tinubu remains steadfast in his commitment to making these refineries operational. He has accepted the challenge of fixing the inherited assets and liabilities, stating, "I am not a man who looks back... It is my responsibility now to fix it and make it work." This declaration has sparked a deeper conversation about the future of Nigeria's energy sector and the role of the government in driving economic growth.
The Refineries' Troubled Past
The state-owned refineries have been a contentious issue for years. Despite billions spent on turnaround maintenance, they have remained largely dysfunctional. Obasanjo's experience with attempting to transfer their management and ownership to private investors highlights the challenges faced by the government in running these facilities.
Shell, one of the major oil companies, declined Obasanjo's offer to take a 10% equity stake and run the refineries, citing reasons such as the small size of the refineries, poor maintenance, and corruption. This rejection led to a series of events, including an offer from Dangote Group to acquire a 51% stake in two of the refineries, which was later reversed by Obasanjo's successor.
Expert Opinions and Stakeholder Views
Energy expert Dan Kunle faults the government's continued rehabilitation efforts, advocating for privatization and redirecting public funds to other sectors of the economy. Kunle argues that the refineries have been a drain on resources, and the government should learn from past failures and adopt a different approach. He challenges the information being presented to Tinubu, suggesting that it may be influenced by self-interested managers.
On the other hand, stakeholders like oil marketers and the Port Harcourt Refinery Host Community Bulk Petroleum Retailers Association (HOSCOM) have expressed support for Tinubu's plans. HOSCOM believes that the revival of the Port Harcourt Refinery would not only create jobs and stimulate businesses but also have significant political implications. They have pledged to double their support for Tinubu if the refinery becomes fully operational before the next general election.
A Way Forward?
The disagreement between Tinubu and Obasanjo, and the varying opinions of experts and stakeholders, highlight the complexity of the situation. While some believe that privatization and a shift in focus to other sectors are necessary, others see potential in the refineries' revival.
The challenge for Tinubu's administration is to prove that these refineries can move beyond periodic restart announcements and become commercially viable refining operations. This will require not just technical expertise but also a careful consideration of the political and economic implications.
In my opinion, this debate underscores the importance of finding sustainable solutions for Nigeria's energy sector. It is a delicate balance between utilizing existing assets and exploring new opportunities. The outcome of this situation will have far-reaching consequences for Nigeria's economic growth and development.
