"Over the last few decades, we've been trying to educate policy-makers in Nigeria that the multiplier effect of one per cent increase in the price of fuel is like 11 times other factors in the economy."
A United States-based Nigerian professor and entrepreneur, Izielen Agbon, has said that money allocated for the repairs of the four Nigerian refineries "have consistently been stolen by those in charge of managing them."
Mr Agbon, a reservoir engineering expert and chief executive officer of Energy Equilibrium Inc., Dallas, Texas, was speaking on Focus Nigeria, aired by AIT amidst the controversy between the Nigerian National Petroleum Company Ltd (NNPC Ltd) and Dangote refinery.
The energy expert joined the television programme virtually on 23 July.
Despite being a top oil producer in the world, Nigeria has relied on imported petroleum products for its economy for decades.
The country's Kaduna, Warri, and Port Harcourt refineries have remained moribund for years.
Meanwhile, the Nigerian government has been paying subsidies on petrol despite its denials, as reported by PREMIUM TIMES.
'Why Nigerian refineries are not functional'
Mr Agbon said the "weakness" of the private sector was the reason the federal government had to acquire capital for building big infrastructural economic entities like the steel industry and the refineries.
The professor said the four refineries in the country at one time were operating at 85 to 90 per cent capacity and were never repaired with respect to turnaround maintenance.
"The first question that everybody avoids is what is the critical problem with respect to the functionality of our four public-owned refineries?
"The critical problem was that they were mismanaged. Corruption. The failures of turnaround maintenance were due to the fact that the amount of money spent on turnaround maintenance over a period of 30 years consistently has been stolen by those in charge of managing them.
"Turnaround maintenance of refineries is not rocket science; it is done all over the world, and there are specialists in it.
"In Nigeria using the idea of local content, they decided that the turnaround maintenance about 25 years ago should be given to Nigerian companies who have not had a history managing or turning around any refinery.
"How can you spend over one billion dollars for a contract with a local contractor with no history for turnaround maintenance and therefore, over the years, if you go and do an audit of all the monies spent on turnaround maintenance and where they failed, you will find instances of corruption, stealing and looting of public funds," he said.
'A new colonialist capitalist country'
Mr Agbon said the price at which people buy petrol and cooking gas is sure to affect the economy because these are products that affect the everyday life of over 90 per cent of Nigerians.
"Over the last few decades, we've been trying to educate policymakers in Nigeria that the multiplier effect of one per cent increase in the price of fuel is like 11 times other factors in the economy.
"If you increased petrol price by 10 per cent you are going to have a 100 per cent impact on food prices and about 70 per cent on transportation," he said.
Speaking on the controversy trailing the disagreement between Dangote and NNPC Ltd, Mr Agbon said the major factor should be "if Dangote will supply below or at the current price, it would be good for the country".
"If, on the other hand, it is such that monopoly pricing is going to be imposed on the market and prices are going to be higher than current prices, then that is not going to be good for the economy because it is not going to be good for households survival and masses of Nigerian people: how would it affect the price at the end of the day."
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He described Nigeria as a "new colonialist capitalist country".
He said, "Basically, the fundamental structures of the Nigerian economy have not changed. Because of colonialism, we are exporters of raw materials and importers of finished goods. Basically, the economy of Nigeria is built around consumption, not production.
"Foreign firms came to Nigeria, collected raw materials and dictated the price of that raw materials. They went to add value in their own country, created jobs in their own country, and sold the final products to Nigerians as consumers.
"Simply put, we are like a group of people who are farmers, and then people came and took yam from our farms, went to their homes and prepared the foods and then sold the finished foods to us at a higher cost," he said.
