PH Refineries: Still, Not So Much To Cheer, By Taiwo Adisa
Members of the Nigerian National Petroleum Corporation Limited (NNPCL) management team were in celebrations on Tuesday as the company announced the restart of the 60,000 barrels capacity Port Harcourt Refinery, which had been moribund in the last two decades. I must confess that I was one of the skeptics all the while. I was convinced that nothing good would come from the dead Nigerian refineries, Port Harcourt, Warri, and Kaduna, owing to past experiences.
Recall that the Turn Around Maintenance executed on those refineries started from the era of the goggled General Sani Abacha in the late 1990s. It continued all through Presidents Olusegun Obasanjo, Umaru Yar’Adua, Goodluck Jonathan, Muhammadu Buhari, and now, Bola Ahmed Tinubu. At a point, we were told that the country has spent $20 billion trying to revive the four dead refineries, the exact amount Aliko Dangote spent to bring alive the giant refinery in Lekki, Lagos.
So, as I watched the clips of NNPCL’s officials celebrating the return of Port Harcourt Refinery, I was enveloped in skepticism. Once bitten, they say, twice shy. In this case, the promises made to bring back the refineries over the years are more than basketful. And you will agree with me that the doubts I had were not unfounded.
I was part of a Senate Committee team that embarked on a series of oversight functions on the Port Harcourt Refineries between 2012 and 2013. After hours of tours around gigantic edifices, including entering into some restricted segments, the committee would retire to the boardroom and get treated to several slide shows of the journey so far and the preferred destination. In one of those briefings, I could recall the head of the refineries at the time giving very firm assurances that the refineries were on their way back, latest by November 2014. He said that everything that needed to be procured had been done and paid for. He said that the government, in its determination to resurrect the dead was ensuring that money would not be the stumbling block and that it was either the equipment that needed replacement was already being produced or in some cases, were already being shipped to Nigeria. The government had made all the payments, he said, adding that nothing was going to hinder the delivery of the refineries.
Alas! 2014 came and gone. We entered 2015, and there came the Change in government. The stories around the refineries also kept changing alongside the slogan of the Buhari government, and in line with that rigmarole, nothing concrete happened in the eight years of Pa Buhari. But that did not mean that funding of the TAMs stopped. The government kept pumping money into the same project we were told was nearing completion in 2013 and you would marvel, at what had happened to the strict assurances given by the managers of Port Harcourt Refineries at the time. But then, if you recall that this is Nigeria and that stories about the government’s service delivery can change colours as fast as the chameleon, you wouldn’t have too much heartache. So the feeling was, let’s wait and see as we heard of the smiles on the lips of the NNPC lords last Tuesday.
Even when the corporation reaffirmed late on Tuesday that it had indeed started producing at the 60,000-capacity refinery in Port Harcourt, something still kept ringing in my ear, let’s wait and see. That same night, Sahara Reporters came up with a story that nearly deflated the NNPC’s balloon. It claimed that the company merely bought items from a nearby supplier and blended the same into what it claimed to have been refined at the old refinery. Not a few of those who were already wearing their dancing shoes got the shock that night. What could be amiss? The shock waves also pulled the management of the NNPC from its usual taciturnity on critical matters as its spokesman had to come up with some clarifications.
The company’s spokesman, Olufemi Shoneye, said the story by the online newspaper was informed by ignorance, adding that the refining process for petrol was complex. In an interview published by Nigerian Tribune on Friday, Shoneye further clarified and urged Nigerians not to be swayed by individuals whom he said are misusing technical terms “they don’t fully understand to spread misinformation or hinder progress.”
According to him, “Refining and blending are interconnected processes crucial for crude oil processing and optimizing refinery yields, especially when producing Premium Motor Spirit (PMS). PMS is not a single product but a carefully crafted blend of various refinery outputs, including naphtha, reformate, pentane-plus hydrocarbons, and other middle distillates, designed to enhance value and meet consumer needs. Blending operations are standard in refineries worldwide, with the process and ratios varying based on factors like crude oil type, refinery configuration, and specific fuel requirements (such as octane rating or sulfur content).”
Notwithstanding the explanations by the NNPC, there remain some unanswered questions that continue to make the celebrations tentative. One of the issues is the implication of the NNPC refining on the local market and then why the price from the company is higher than that of Dangote. Petrol dealers said during the week that NNPC was selling higher than Dangote by N75 per litre. That should be strange. Recall that on Friday, Dangote Refinery announced it was ready to sell petrol at N970 per litre to anyone willing to buy from two million litres upwards. PETROAN claimed NNPCL was offering a litre at N1,030. The week before, Dangote had announced a N20 naira per litre reduction on petrol. So, as far as Dangote is concerned, Nigerians know where he stands with prices. Curiously, the NNPCL came up with a blank cheque. Though it announced that the old PH Refinery could attend to some 200 trucks and that some tankers had already started loading fuel, no one was sure at what price. And there was no clear confirmation any such number of trucks were loaded. How would the tankers load fuel at an unknown price and who would they dispense the same to? We are also left in the dark as to how much NNPC was going to get the crude. Is it the same price as Dangote or lower? Same as the international price? Those are details the NNPC needs to provide. The questions are against the backdrop of the operational procedures, which ensured that the NNPCL enjoyed a special government allocation of 445,000 barrels per day for domestic consumption. All the questions again dovetail into the whole fuel subsidy gamut, and the voodoo the Nigerian citizens have been victims of all the while.
As much as the NNPCL, the president, and leaders of the All Progressives Congress (APC) would want to thumb their chests and announce themselves as the savior of the Nigerian nation on account of the revival of one of the four dead refineries, there are still questions to be answered. So they should not be surprised to see the cautious enthusiasm on the faces of their countrymen. And now that the NNPC and President Tinubu have done the unthinkable, they need to go the whole hog. Control of the production process of any product should give leverage on price determination and that should bring something positive to the men, women, and children on the street. Even if all four refineries in Port Harcourt, Warri, and Kaduna start operations tomorrow and petroleum products still hover above the N1,000 per litre range, the lips would at best only wear wry smiles.
