Taiwo Oyedele, the chairman of the Presidential Fiscal Policy and Tax Reforms Committee, has exlained that Nigeria is better off with its refinery not operational.
He disclosed this at the Platform’s Independence Anniversary event, tagged ‘Africa Rising Continent – Nigeria’s Strategic Role’, held on Monday, October 2, 2023, in Lagos.
Oyedele warned that if Nigerian refineries produce oil, managerial inadequacies might make a litre of petrol the most costly in the world.
This is in tandem with an earlier report by the Federal Government that the price of petrol at filling stations will not go down even if all five Nigerian refineries are working at full capacity and producing the most amount of the product.
Too much money spent on refineries
According to the Punch report, Oyedele quoted the National Assembly, stating that over N10 trillion has already been spent on maintaining the refineries when they have not produced anything.
The National Assembly said we have spent over N10tn maintaining our refineries even when they have not produced anything.
According to him, even if Nigerian refineries process crude oil, unless we deal with our inefficiency, one litre of petrol will be the most expensive in the world.
“If Nigerian refineries process crude oil unless we deal with our inefficiency, one litre of petrol will be the most expensive in the world. You would have succeeded in replacing the subsidy at the pump with subsidy of the refineries.”
Mixed Reactions trail Oyedele’s comments
The National Controller of the Independent Petroleum Marketers Association of Nigeria, Mike Osatuyi, responded to Oyedele’s remarks on the sale of refineries. He said it was ideal for the nation to have its refineries.
He said that building Nigeria’s refineries will ensure energy security and increase employment.
“You can’t control what you don’t own. So, it is good for us to have our own. The cost of importing petrol is now very high. I think the government is moving in the right direction by making the refineries work very soon.”
Speaking on the subject, Wale Oyerinde, Director-General of the Nigeria Employers Consultative Association, suggested selling the refineries.
He claimed that Nigeria’s refineries have been operating at a loss for many years and that it makes no sense to keep investing money in an inefficient system.
He advises that the government transparently sell it to Nigerians, allowing the average Nigerian to invest if they so choose, with the government keeping a small portion of the proceeds. He said that there was no use in storing it because the refinery had not been operating.
“It should be sold to individuals who can run it as a business and then the government will play the role of a regulator rather than continue pumping money into it. It has been our position, that the government should transparently sell it off to Nigerians or private individuals or experts that can run it.”
Niyi Yusuf, the chairman of the Nigeria Economic Summit Group, said that over time, the private sector has demonstrated its capacity to effectively optimise resources for the benefit of all stakeholders.
He contends that underperforming assets, such as refineries, should be privatised to allow the private sector to provide the capital, technology, technical expertise, and managerial know-how required to cease draining the public budget and begin generating revenue for consumers’ use.
“More than half of our population have not witnessed our refineries work at optimal capacity. It’s about time we try a new strategy and privatisation is a proven model”