Sunday 24 December 2017


Muhammadu Buhari
The decision of the Federal Government to spend $1.8billion on the turn-around maintenance (TAM) of the nation’s four refineries has not gone down well with many Nigerians. It was met with skepticism and outrage by many citizens who had watched successive governments fritter away humongous sums on controversial TAM of refineries with little to show for it.

Over $20 billion has been invested in the exercise by past administrations. Whereas, the combined installed capacity of the refineries is put at 445,000 barrels of petroleum per day, the facilities have hardly ever worked at more than 30 per cent of their combined capacity at any time, with zero refining recorded on several occasions.

Briefing newsmen after the last Federal Executive Council (FEC) meeting, Minister of State for Petroleum, Dr. Emmanuel Ibe Kachikwu, disclosed that with the ground work for the TAM nearing completion by the end of this year, and with the TAM taking another 12 to 18 months to complete, the refineries should be ready to function optimally by first quarter of 2019.

Many Nigerians who have followed the history of TAM and the opaque decision making processes associated with it are bound to ask questions. Because TAM funds were believed to have been used for election purposes by some past administrations, the question is bound to be asked: Why the approval for the TAM now that Nigeria is approaching another election season?

The present government has a responsibility to convince Nigerians that it will not use TAM funds for elections. After the seeming vacillation on what to do with the refineries at the inception of this administration, it now appears that a consensus has been reached to embark on the old but previously unhelpful road of the TAM.  President Buhari, as the substantive Minister of Petroleum, apparently favours the   TAM option, which is contrary to the opinions of many energy experts and stakeholders who think that an outright sale of the refineries would have been the way forward. In fact, the Dr. Olusegun Obasanjo’s administration had perfected plans to sell the refineries to willing local bidders and their foreign collaborators before the successor Umaru Yar’Adua government went back on the plan and revoked the sales.

Many industry watchers still see that revocation as a missed opportunity, given the politicization of many TAMs in the past and the official duplicity and sleaze associated with them. The belief is that the country cannot afford the hemorrhaging of its scarce resources in the name of TAMs in perpetuity. What is the guarantee that this TAM and its outcome would be different from the previous ones?

The money earmarked for the planned TAM, US$1.8bn, is not a small amount. Chances are that with the parlous state of the economy, most of it would be borrowed. When this money is not used for what it is meant for, its repayment will be heaped on future generations of Nigerians. This is the baggage the country has borne for too long and has become decidedly tired of.

There is the need for political will by this administration to do things differently. The plan to have new clusters of refineries existing side by side with the present ones to optimise the economies of scale should not be put on hold. It is a good plan.  Ultimately, the nation must work towards optimising its refining capacity, considering the importance of petroleum products locally and internationally, and the declining global accent on fossil oils notwithstanding. As a country, we have the obligation to maximise the returns realisable from this natural resource, even as we join the rest of the world as they work towards cleaner fuels.

Maintenance contracts, complete with local content, should be demanded and written into the Memorandum of Understanding (MoU) for the TAM so that the mistakes committed during the building of the refineries can be corrected. This is the standard practice in most parts of the world. The failure to ensure this in the contract for the construction of the refineries is probably traceable to ineptitude and corruption of the government officials who handled the contracts.

In principle, when the local refining capacity of a country like ours is optimised, the need to spend hard-earned foreign exchange on imports of petroleum products would be minimised or completely removed. Besides, additional monies can be earned by taking advantage of demands in the West African sub-region and, indeed, internationally. That we have not done this is one of the abiding failings of our successive governments to the shame of our country. (Sun)

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