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Fuel crisis: Buhari should fix refineries urgently – Comrade Esele

Category: Big Story Published on Sunday, 31 May 2015 05:00 Written by Fidelis Mac-Leva Hits: 15

Comrade Peter Esele
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Comrade Peter Esele is a former President of the Trade Union Congress (TUC). He has also served on  the committee on the Petroleum Industry Bill.  In this interview, he shared his thoughts on the problems facing  the oil and gas sector during the past administration and advised the new president on the way forward. Excerpts:
As someone who is conversant with the oil and gas sector having served as President of TUC and PENGASSAN, what would you identify as the major problems of the sector, especially during the Jonathan-led PDP government?
One of the major problems of the industry during the last administration is the complete total abandonment of our local refineries. How do you explain that a country produces an average of 2.1 million barrels a day; it is supposed to be 2.4 but due to vandalism and so what we now get averagely is 2.1 million barrels. But with all of this the country cannot refine a crude. How can you explain that? How do you explain that for 16 years we have had a civilian government from 1999 to date, but our refineries are in a state of comatose? Turn-Around-Maintenance is not done and even if they were going to be done they were given to political cronies. In those days in NNPC, TAM was done by staff of the NNPC. What you now do is to get some engineers from those who built the refineries to now continue to look at it. But during the Babangida administration TAM became a matter of the Supreme National Council (SNC) or the Armed Forces Ruling Council, then after that it became an issue for the Federal Executive Council. When Gaius Obaseki was the Group Managing Director of the NNPC, TAM was not a front page story because it is a normal refinery practice. It is like telling me you, as a reporter now reporting for Daily Trust, how does your being a reporter become a front page story in Daily Trust? When politicians started getting themselves involved, because  they can make much money from TAM, it now became an issue for the FEC. That is supposed to be an issue for the board and management of the NNPC but that was scuttled. Even when the refineries are now working you find out that they now started the refinery of crude. As I am talking to you now the Warri Refinery may not work at optimal capacity but it can refine maybe about a million or two million liters a day.  Why do you have to completely abandon it? That is one thing that the incoming administration must look at.  Take the three refineries: Port Harcourt, Warri and Kaduna, look at the challenges that are available, then take away the corrupt elements and then see how you can make things work. You can take Kaduna for example.  Kaduna refinery alone is enough to change the economic life of the State. And let me tell you, for your information, Kaduna refinery has the capacity to generate power for the whole of Kaduna, if things were done properly. But that place was grounded because ordinarily refineries are supposed to generate their own power and are supposed to be self-sustaining. What about bitumen? Kaduna Refinery was set up to refine heavy crude unlike what you have in Warri; it was set up for heavy crude: Venezuela, Saudi Arabia, and Iraqi -all those heavy crude; that was what it was set up for. If we had done all of that, we would not have been in this mess. I read it when a former minister of petroleum resources, Professor Tam David West, said  that it is possible to have a liter of petrol for N40.  I can’t condemn what he said or judge him because he probably knows some things that I don’t know, but I know that as long as a barrel of crude is given to NNPC in dollars that would be difficult to achieve. And as long as you continue to import instead of refining locally it would also be difficult to achieve that. But if you refine locally then it will be a different ball game. Another aspect that the administration must also look at is that Japan does not have a single drop of crude oil, Singapore does not have but they have one of the largest refining capacities, Japan has over a hundred refineries, they have modular refineries that can refine about 5,000 barrels per day. These are refineries that take between 12 to 18 months to be ready and they can be scattered around the country. The big ones like the one NNPC has, the one that is coming from Dangote- those ones are also there but those little ones that are scattered everywhere would meet the needs of the people. There would be no need to go and queue up in Apapa. If you go to Apapa if not for NUPENG and PENGASSAN intervention, it is a mad house. Those are also things that the new President should look at; look at those three refineries and then look at the structure of NNPC  so as to make the refineries a lot more functional.
Another contentious area during the past administration is the politics of oil subsidy, which had generated a lot of controversies. Going by the experience of the Jonathan administration what would you advise the new government?
The bottom-line about oil subsidy, like we used to say when I was president of TUC and PENGASSAN is that the  issue is not whether to take the subsidy away or not. We said before you take it away there are conditions precedent. One, make our refineries work.  If the president comes now and says in six months we are going to make these refineries work and  this is how much we are going to be producing, then, secondly look at the fraud.  The government is not supposed to be complaining. How can a government come and say marketers are dubious and are looting our money and you cannot arrest or prosecute one. If you, as a government with all the security apparatus and powers that you have, you can’t do anything and you begin to complain,  is it the ordinary man that can come and do something? So let the refinery work. The president should also show us that he is not only in government but also in power and as such those who are milking the country dry through illegal activities are also brought to book. Then, he should come out and let Nigerians know that these are the challenges that were being faced, these are the pros of subsidy and these are the cons. Then Nigerians would then look at all of these. Not that we should tighten belts while yours is loosened.  Nobody is going to accept that! We are also talking about the issue of governance; somebody cannot come and be earning $2 million. Barack Obama earns $400,000  per annum. Meanwhile, those in our National Assembly earn about $2 million a year and you are telling the people to tighten their belts, no! So there are things that people must also be able to look at and say this guy would not loot our treasury. One advantage that Buhari has going for him now is that there is a universal agreement that he is not corrupt. From 1999 to date all our leaders have been mouthing corruption but they don’t do anything about it; whatever they do is mere cosmetics. But there is a feeling that the president   is different. So my advice is that he must never lose that trust.  If he tells Nigerians there is going to be pain in the morning then he must make sure that there is happiness in the evening. That is when it will become easy for anybody to accept whatever policy. Government has to  look at the PPRA the template. How did you arrive at paying N87 or saying N97 or you want us to pay N120?  How did you arrive at that? How many liters are we actually consuming? There was a time when we were on strike and went to the National Assembly.  They said over 60 million liters, but when we reached the Executive Secretary of PPRA, he dropped it to about 37 million litters and look at the gap almost 30 million difference. The question then is where is the money? So you must study the entire industry to now come up with a policy. The only thing they tell us now is ‘deregulate’ but we know that deregulation is more than just pump price. So we are saying look at the whole thing in totality then you can now meet the union with all the stakeholders and the discussion will flow from there. Not just coming to force things down the throat of everybody.
There have been several subsidy probes during past administrations that never saw the light of day. What would you advise the Buhari administration with regards to such?
I have actually had the privilege to work with three presidents; Obasanjo, Yar’Adua and Jonathan. I also served on several boards and committees. One thing I will tell you is that our major problem is not policy. On paper we can rival any country in the world but implementation is where we are zero; we lack the discipline to follow through. Any serious country follows things through. That is why in 2015 we can only boast of three refineries. What is the population of Iran? They have 22 million and Singapore has over 15 million and they are busy refining and exporting, but all that you and I think about now is crude oil; you talk about kerosene, petrol, aviation kero and diesel- these are the only things they talk about in Nigeria. A barrel of crude has about 200 derivatives, but our attention is only on the four I have mentioned and we take 400,000 barrels and go and refine, where are rest byproducts? So probes are not working because our institutions are very weak; it is man know man! In a serious country I don’t need to know you and you don’t need to know me because the law just takes it course. But here in Nigeria the president will intervene, governor will intervene, commissioner of police will intervene, Chief of Army staff will intervene- everybody is displaying power. You can’t grow that way; if you allow things to run its course then we can have a country that puts its best forward. But because we don’t do that, everything we do, whether in terms of policy or probes, are not working. Therefore, the President must, from Day One, not pretend but rather set a standard of zero tolerance for corruption and it will be so easy for the whole process to cascade down. He does not need too many points agenda; oil and gas is the pillar of the economy, education, security, agriculture that’s all. For me, these are the areas that he should focus his attention on and once he does that whoever is behind the subsidy fraud he must use them as a deterrent to others.
What sort of people do you think should be given the opportunity to manage the oil and gas sector in the new administration?
First of all they have to be people who have knowledge of the sector, not just to go and bring politicians because they voted for him or made him get the highest votes. You were elected by all Nigerians and Buhari must not forget the mantra on which he was elected – ‘change.’ Having been elected on the mantra of ‘change’ we expect change in all ramifications; change in the way his ministers are chosen, change in the caliber, quality and character of the ministers, change in the way these ministers are deployed.

A A Azaman
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