This Day (Lagos)

Nigeria: Refining The Country's's Petroleum in Senegal?

editorial

Lagos — The revelation by Minister of State for Petroleum Resources, Odein Ajumogobia that Nigeria is considering the possibility of processing some of its crude oil in Senegal from where the refined product would then be imported has been received with rude shock.

It is a further deepening of the country's fabled paradox of scarcity amidst plenty. The government, obviously overwhelmed by the petroleum products conundrum and evidently clueless on the way out of perennial fuel scarcity in the country, appears ready to experiment with just any option presented to it.

The Minister explained while receiving a Senegalese delegation led by the country's Minister of Energy, Samuel Amete Saar in his office, that the Nigerian economy has grown bigger than its refining capacity, hence the need to look into other available options. He added that even if all Nigeria's four refineries were working at optimal capacity, the country would probably still be importing more than 40 per cent of its petroleum products requirement.

Ajumogobia's statement followed a request by Senegal to President Umaru Yar'Adua to approve an extension of crude allocation to its refinery, which is currently undergoing expansion. Obviously elated by Senegal's request, Ajumogobia explained that the relationship was symbiotic since Nigeria would equally benefit from the move when approved by Yar'Adua because Senegal has excess crude oil refining capacity, which Nigeria could tap into to feed its under-served domestic market.

We are scandalised by this confession of official ineptitude and inability or unwillingness by the government to address the issues in the downstream petroleum sector effectively to ensure that petroleum products are adequately available for Nigerian consumers.

Or doesn't the Minister's confession amount to a tacit admission of the confusion over the nation's refineries, which have continued to perform dismally despite the huge sums of money expended yearly on their turn around maintenance (TAM)? Government is on record to have said that the refineries would be privatised when all of them packed up, but it does not seem that it is keen on this.

While trying to explain away the country's inability to meet the domestic requirement of fuel consumption, the Minister attributed this to the rapid growth of the nation's economy. This, if actually true, is good news. But the Minister's lamentation makes the development, which should be an achievement look like a burden. What has a country with four refineries done to match this growing demand? Resorting to massive importation of petroleum products is an admission of the county's failure to plan ahead. And of course, contemplating refining crude oil in Senegal is taking it to ridiculous levels.

Indeed, where is the sense of shame? When Senegal with a single refinery that depends wholly on imported crude oil is planning to expand its refining capacity, Nigeria with four is finding it difficult to maintain them let alone think of optimizing their refining capacity.

As if to add to the confussion, it has been announced that oil majors will be forced to invest in refineries. According to the Director of the Department of Petroleum Resources (DPR), Bill Agha, one of the pre-conditions for any oil major seeking the renewal of its oil concession licences will be to take equity in government-owned refineries or invest in new refinery projects before such applications are considered.

With the ongoing attempts to finally deregulate the downstream and encourage private investors in the refineries, we feel it is time for government to take deep breath and plan how it would resolve the pressing issues of the downstream sector once and for all. Adhoc measures will not help, and we urge President Yar' Adua to say "no" to the Senegal option. When we would have solved our problems, we could think of refining crude oil in Senegal as a way of supporting their economy in the spirit of African brotherhood.


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