Indications are pointing to the fact that the Federal Government has shelved its plans to build three new refineries, eleven months after it announced plans to do so.
This is said to be due to the unresolved issue of the deregulation of the downstream oil sector. This came as organized labour expressed surprise at President Goodluck Jonathan’s supplementary budget of N161billion for fuel subsidy for 2012. Instead, they advised that he should tackle corruption in the oil sector.
The President had in a letter to the National Assembly on Tuesday had said that the amount of N888bn budgeted for fuel subsidy this year would be inadequate.
But even as the FG is seeking additional funds, it is yet to start making good on its promise in January during the subsidy protests of building three new refineries, in addition to 3 proposed refineries announced two years earlier by the Nigerian National Petroleum Corporation (NNPC).
The NNPC had in 2010 announced plans to build 3 new refineries to be sited in Bayelsa, Kogi and Lagos. The Group Executive Director, Engineering and Technology, Mr Billy Agha who stood in for the Group Managing Director then had said that the refineries which would be created by the Greenfield Refinery and built in partnership with the China State Construction Engineering Corporation was going to create 7, 000 jobs.
The Minister of Works, Mr Mike Omolemelen, who had spoken then to douse the tension of the protesters, had said, ““I want Nigerians to know that when these new refineries are completed, we will be a net exporter of petroleum products and prices will begin to come down, just as we are witnessing in the telecommunications sector with the GSM regime.
“That is my message to Nigerians. Let us support the government. Let us join hands with the government because it cannot and will not take any decision with the aim of punishing fellow Nigerians. It is impossible. So, Nigerians should have this at the back of their minds.
“The one in Lagos is with the capacity of 200,000 barrels per day, while the ones in Kogi and Bayelsa have the capacity to produce 100,000 barrels per day.”
However, checks at the NNPC have revealed that the government has not done anything about the refineries 11 months after those promises were made.
A top source said the refineries were supposed to be built using public-private partnership and form part of government’s plan to stop importation. This is besides the six that are solely private-driven.
“But from all indications, the government has developed cold feet and the six by the private sector seem to be still-birth. There are various stakeholders who prefer fuel importation. These are the people that will not allow the plan to build refineries to succeed.”
President Goodluck Jonathan had said that the existence of the fuel subsidy regime was keeping private investors from building refineries, and as such, the fuel subsidy had to be ended.
Efforts to get the comments of NNPC officials on the status of the refineries did not succeed.
Calls to the Acting General Manager, Public Affairs, Mr Fidel Pepple were unsuccessful as it was learnt he was out of the country. His colleague in charge of Media, Dr Ibrahim Umar neither answered his calls nor replied text messages to him asking about the status of the refineries.
In his comments on the failure of the government to build the three refineries, the President of the Trade Union Congress, Mr Peter Esele, said that President should fulfil his promise as the people were expecting some form of assurance on it.
“He has made a promise, those people want to do it, but they want a guarantee from the government. It is important for the President to give them this before they start. It is incumbent on the President to break the ground for those refineries to be built. This thing has to do with credibility.”
He also expressed surprise that the government would request an additional N161billion for fuel subsidy rather than tackle corruption in the subsidy regime.
He also noted that based on the increase in pump price by 60 per cent in January, the amount spent should have reduced.
On her part, the president of the Campaign for Democracy, Dr. Joe Okei-Odumakin, described the present government as profligate.
She said, “To spend N1trn on subsidy in a year at N32 per litre tax, which was imposed on petroleum, is the height of fiscal recklessness.
“No country that runs on this template can make a progress.”
The Petroleum and Natural Gas Senior Staff Association of Nigeria has also urged the FG to repair existing refineries and build new ones.
The group warned that import-driven deregulation would ruin the nation’s petroleum industry.
President of the association, Babatunde Ogun, said, “We call on the government to ensure that the existing refineries perform optimally and new ones are built within a specified time frame. It does not have to be giant refineries, but pockets of refineries across the country, especially in the oil-producing states.
“Similarly, operators in the upstream sector must be made to refine a specific percentage of their allocations locally.”