20 February 2008
editorial
Lagos — The news that Warri Refining and Petrochemical Company (WRPC) has commenced operation, after some years of dormancy, could not have come at a better time than now.
This is because Nigerians have been made to suffer, for long, the pains of petroleum products shortages, despite the fact that the country ranks among the first 10 in oil and gas production in the world.
Besides, the dysfunctional state of the country's four refineries, (three others located in Port Harcourt and Kaduna) with a combined capacity of 445,000 barrels per day (bpd) has led to her depending on imported fuel for local consumption. The scenario created by the country's dependence on fuel import for consumption, has foisted on her some ugly consequences.
First, it is on record that Nigerians are paying higher pump prices for petroleum products because the products are being imported. In fact, oil industry experts have submitted at several times that fuel products cost more in Nigeria than in all other countries that produce oil, especially those within the Organisation of Petroleum Exporting Countries (OPEC), which Nigeria is a leading member.
For instance, aviation operators have sometime in the past raised alarm over the cost of aviation fuel in the country claiming that it ranked among the highest in the world.
Second, the grounding of the real sector and the epileptic performance of the few existing industries, are attributable to the energy crisis in the land. Only last year, a textiles company in Kaduna shut down and laid off some 4,000 workers, the company hinged its shut down on its inability to meet the demand imposed on it by black oil importation. Black oil, a critical input in the production process of the company, is supposed to be supplied by the Kaduna Refining and Petrochemical Company (KRPC). Many other firms also shut down on this score including some leading engine oil producing companies, which could not import base oil, to sustain production. Again, base oil can only be produced in KRPC, which is presently shut.
Third, the huge import level of petroleum products has remained a drain on the country's foreign reserves, amid its limited availability and other competing import demands.
For instance, available records show that the fuel import bill of the country currently stands at $1.8 billion monthly. Accordingly, an average of 30 cargoes of petroleum products are now imported monthly into the country as against some eight cargoes imported in the 1990s for strategic purposes.
This development has laid the country open, hence any vagaries in the supply matrix of the foreign market catches the country unprepared, as has been the case in the last decade.
Given all these, it would only amount to ingratitude not to appreciate the efforts of the management of the Nigerian National Petroleum Corporation (NNPC) headed by Alhaji Abubakar Yar'Adua in re-streaming the WRPC. We commend Yar'Adua and his team, especially as those who brought back life to the refinery were said to be staff of the corporation.
We urge, however, that this feat by the corporation's staff should be extended to the Kaduna plant, which has remained fitful since 1993, when it was gutted by fire, twice. We are aware that efforts are on to carry out a turn around maintenance (TAM) of the plant. Yar'Adua must ensure that this programme does not fail as in previous ones. The saboteurs must be check-mated, especially those staff of the corporation, who had become evil allies of fuel-import mafia and had vowed to perpetually keep our refineries shut to foster their business. It is somewhat painful, being an economic sabotage, that while the fuel import cabals thrive in their business, the economy counts its losses in form of the rising unemployment, insecurity of lives and property, low gross domestic product, hyper-inflation and the like.
Now, with the re-streaming of the WRPC and that of KRPC around the corner, it is our submission that prices of fuel products will be relaxed. We say so because the current high cost of the products could not be divorced from the fact that local consumption had been import-dependent. Government should take this challenge seriously given that there are on-going discussions between the Nigeria Labour Congress (NLC) and the Federal Government on this score. The discussion should therefore be how to reduce the cost of fuels. This will help to further boost the economy of the country, as some small scale firms, already shut, will be up again.
Yet, we want to submit that government should initiate a full-scale probe into the activities of these refineries to establish who were responsible for their failure to function in the last decade and a half. Until such a time that destroyers of government property are caught and punished, vampires and economic saboteurs, who pretend to be government officials will not stop to take the country and her people for granted.
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