Issa Aremu
14 August 2007
opinion
Lagos — THE controversy over the status of Port Harcourt and Kaduna refineries is getting louder by the day.
This controversy has, however, taken the dysfunctional line of those either for the sale or against it, namely protagonists and antagonists alike. In this divisive process, there have been more distortions, half truths, personalization and plain diversions from the critical real issues.
To this extent, the debate so far is clearly unhelpful. It is unacceptable that the age-long protracted problems facing the downstream sector are simplistically reduced to the crisis of ownership, that is the process of the privatization and the alleged imperfections that characterize this process.
For the emerging stakeholders, the issues are much more complex.
Whether the refineries are state-owned or privatized, the critical success factors are energy, security, product availability, management/corporate governance of refineries, product pricing, capacity utilization, local content, employment creation, skill acquisition and decent work. Any attempt to sweep all the above critical issues under the carpet on the altar of the on-going corporate smear campaign and vested interests intrigues amounts to a diversion.
The crisis of production in the refineries cannot and should not be frozen into the sale or no sale of the refineries. It is time that well-meaning Nigerians and patriotic organizations like trade unions advanced the national discourse on the status of refineries beyond its current miserable low level.
The point cannot be overstated that the combined capacity of the nation's four refineries is 445 barrels per stream day (BPSD). The refineries were built over the period of two decades by developmentalist Nigerian state. Up till early '90s, the nation had some value from this strategic investment. Marketing companies took advantage of the developed downstream infrastructure; purchased products from the NNPC depots and distributed them to various stations where final consumers get their products.
Nigeria witnessed adequate product availability and price stability. However, it is now an open knowledge that from the early '90s, domestic refining had been undermined by a number of factors. The failure factors include endless Turn Around Maintenance (TAM) without results and repeated shutdown, low capacity utilization, gross mismanagement, intolerable process losses, low productivity, excessive unit operating cost and bloated overheads, insiders' sabotage (so-called vandalization) and inadequate technological inputs for necessary products and process upgrade.
Today we can actually talk of total deafening collapse of the downstream sector. The shortage of products persists despite the unacceptable endless price increases over the years and the patriotic resistance of the Nigeria Labour Congress (NLC) and Trade Union Congress (TUC) and their civil society allies.
At the height of the June strikes by NLC and TUC, NNPC disclosed that Nigeria, sixth largest oil producing country imports every litre of 30 to 32 million litres of PMS consumed everyday. It is instructive that NNPC officials did not regret this state of abnormality and wholesale import dependence. Refineries are established to overcome the inherent problems of import and make the nation reap the national benefits from our oil resources as an OPEC member. But Nigeria's refineries scandalously had been moving in a direction opposite to the progressive march of the rest of the world.
After extensive study and tour of the industry as stakeholders, Nigeria Labour Congress (NLC) in an Independent Report in 2000 came out with damning findings on the refineries. Yours sincerely bears witness that "the main problem refinery repairs face are the increasing entrenched forces of mafia importers of petroleum products, spare parts, chemicals and influence peddling middle men". Proverbial waters had passed under the bridges of the inefficient refineries since 2000. More billions of dollars had poured on maintenance by "reformist" Obasanjo administration. "Vandalization" and "repairs" had consumed about $40 billion with the attendant results of zero-output and wholesale imports.
Close to 5000 workers had been reportedly downsized in "NNPC restructuring" exercise which is clearly a reaction to existing capacity utilization and wholesome imports dependency. Industries like textiles that wholly rely on critical inputs such as LPFO (black oil) from non-performing refineries are on the verge of total collapse. Wholesome imports have further stressed the weak import reception at Apapa ports with all the environmental risks.
It is now a daily occurrence that tankers go in flames causing criminal accidents on our roads while products hardly reach their destination due to poor roads. It is to the eternal discredit of the refineries that the new celebrated workers are not engineers and technicians adding value but tankers' drivers who hardly reach selling points with products.
Petroleum downstream sector harbours indecent work that takes the forms of outsourcing and casualisation. The legitimate struggle of the sector unions, namely National Union of Petroleum and Natural Gas (NUPENG) and Petroleum and Natural Gas Senior Staff Association of Nigeria (PEGASSAN) had been on how to ensure decent work in the industry.
All the listed issues above preceded privatization or hasty sales as being alleged. In fact, privatization of the refineries featured in the industry lexicon as an option after the deafening collapse of the sector under the weight of state control of refineries by NNPC. For the workers, whether enterprises are owned by government or the public, the critical underlying issues are productivity, employment, decent work and adequate pay.
One acknowledges that President Musa Yar' Adua had commenced the process of review of the privatization process in deference to both the withdrawal of the two Nigerian buyers, namely Aliko Dangote and Femi Otedola of the consortium of companies and the public controversy surrounding the sales. However, beyond the review of the existing sale, it is not over until the refineries work, which is what Nigerians urgently desire.
Mr. Aremu is Vice President of the NLC.
Be the first to Write a Comment!
Copyright © 2007 Vanguard. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.
AllAfrica aggregates and indexes content from over 125 African news organizations, plus more than 200 other sources, who are responsible for their own reporting and views. Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica.
