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Revival of Port Harcourt Refinery, not Yet Uhuru
The news earlier this week of the revival of our old Port Harcourt Refining Company (PHRC), which is the mother of refineries in Nigeria, was indeed cheery to many Nigerians. But with the everyday dissonance between what was revealed to Nigerians concerning the refinery by NNPC on Tuesday and the news emanating from various quarters thereafter with claims and counter claims, cross-sections of Nigerians are beginning to be skeptical about the degree of functionality of the refinery as described to us by its handlers. The kerfuffle nevertheless, it gladdens the heart that at least fuel is being lifted from the refinery, not minding what (diesel, kerosene, PMS et al) after about 20 years of yin and yang. We therefore say congratulations to NNPC.
However, with the diverse stories about the refinery, Nigerians are now concerned about what it has to offer in the area of economic value that will lessen the burden of daily living because of the spiral effect of energy on every sector of our economy. Let me break it down, since this refinery breaks Dangote’s monopoly, Nigerians are eager to know if it will go ahead to have positive implication on our economy by forcing down the price of PMS and by extension the general market situation. This, I believe is the right way to think because if we do not do that now, NNPC will come out with new set of abracadabra that will make the refinery a curse to all of us rather than blessing.
As Nigeria’s debut refinery and situated at the oil rich Niger Delta region, the formation of old Port Harcourt Refinery in 1965 was a response to the growing demand for petroleum products in order to address the economy of the new nation that was already finding it difficult to cope with petroleum importation. As expected, by the late 1960s and early 1970s, Nigeria had attained a production level of over two million barrels of crude oil and was adequately responding to the oil need of the nation until the mid-1970s when the economic surveillance unit of the Nigerian National Oil Corporation (NNOC) indicated that the growing rate of the economy would require the building of another refinery. So, that subsequently gave birth to Warri, Kaduna and the new Port Harcourt Refineries.
But as the decline in the performance of our local refineries started in the early 1990s after the military government ordered NNPC to close account with commercial bank and transfer them to the Central Bank and the subsequent non-functionality of all our refineries, so much noise and corruption have gone under the carpet of the sector over the years. But now that one is back among the moribund refineries, the debate should centre around stabilizing this novel landmark in order to creating a new era of energy sovereignty and economic growth for our dear nation but the bowwow coming from its revival within one week calls for a serious concern. What are these concerns?
Since Nigeria is a free market economy where government has said it has no business doing business and thus left business in the hand of private sector, the first thing that came to mind when NNPC announced the opening of the old Port Harcourt Refinery, is the breaking of Dangote’s monopoly. It is a situation whereby market forces would compete one with another and force down the price of PMS to the advantage of the masses. But already, the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has announced that petrol from the refinery is priced at ₦1,045 per litre, which is ₦75 higher than the ₦970 offer by private sector. As the Public Relations Officer of the association has already classified the price difference as steep margin that is peculiar with a market situation where competition determines profit level, we hope that NNPC will not come out tomorrow with one of their shrews and obnoxious policies and collaborate with Dangote to further increase fuel price?
As it was in Nigeria that the price of PMS is regulated by government, the government and NNPC (if any difference) need to be reminded that Nigeria now operates free market economy contrary to what it used to be before the ascension of the fourth republic when privatization began. since the cry of many Nigerians including experts against privatizing every sector of our economy fell on government deaf ear with the copious evil of such policy everywhere, same government should not at will obstruct what is about to favour Nigerians for their own benefit because government only exist for the people.
Already, we have lately seen some forms of strategic marketing coming out from Dangote through reduction of his PMS from ₦990 to ₦970 which experts say stands at 5%. With Tinubu’s decision to repair the nation’s refineries, we believe the new Port Harcourt, Warri and Kaduna Refineries will also come up soon to enhance domestic production capacity alongside the contribution of private refineries in order to stabilize the downstream petroleum sector and ensure a level playing field for stakeholders as well as complement PMS prices to lessen the impact on marketers and consumers.
Another theory of concern about the refinery according to Timothy Mgbere, Secretary, Alesa Stakeholders of the Host Community, has to do with the lies surrounding the whole situation. According to him during an interview section with Arise TV, “the old Port Harcourt Refinery is built with its own utilities different from the new Port Harcourt Refinery. The tank farm that is servicing the old Port Harcourt Refinery has a different loading gantry at the depot. The party that they held on Tuesday was at the new loading gantry that is directly connected to the new refinery. They went there because the storage facility of the old refinery had some old stock that has been there for over ten years. They released that stock and then loaded six trucks and then televised to Nigerians to means new product from the old refinery.”
Comparatively, the position of Timothy Mgbere that the stock released was old stock is clearly different from what NNPC told Nigerians that the refinery is now working at 60% capacity. But again, we must also question the possibility or the rationality behind having old stock stored for ten years in the face of the various degrees of fuel scarcities in Nigeria over many years that Nigerians believe our refineries are not working? The allegation by Mgbere that only six trucks were released on Tuesday also conflicted the claim by NNPC that about 1 million litres of refined products were released because in Mgbere’s explanation, only six 33, 000 capacity trucks loaded. Mathematically, 33,000 multiply by six trucks will give you 198,000 litres which is a far cry from the “about 1 million litres” that NNPC claimed to have released on that day. Perhaps the 1 million litres released by NNPC is inclusive of kerosene, gasoline, diesel and other products which Mgbere did not disclosed.
Corroborating Mgbere’s claim is a report by Punch Newspaper on Wednesday 27th November that “there were claims later in the day that the unveiled plant was not producing petrol, as report had it that the refinery was only blending the product.” According to the report, a top official at the petroleum ministry who spoke in confidence due to the seriousness of the matter said “there was no and cannot be any PMS produced from the NNPC Port Harcourt (refinery) until the refinery’s catalytic platform unit is installed and made operational.” Still according to the report, NNPC spokesperson, Olufemi Soneye, said that the refinery which is currently operating at 70 per cent of its installed capacity would have diesel and Pour Fuel Oil as its highest output with daily capacity of 1.5 million litres and 2.1 million litres, respectively.
Still on the report, while feeding journalists on Wednesday, NNPC spokesperson said the firm had not started selling its products to oil marketers but that only NNPC retail stations are receiving products from the refinery. This of course was substantiated by another report on Thursday 28th November (third day after the purported released of fuel from the old refinery) by Olufemi Soneye that NNPC is still reviewing its prices and is yet to commence bulk sales because its portal is still closed. The question to ask at this juncture is: what is the true nature of the refinery? If anything to go by in all these narratives, it will be to agree with Soneye, who is the image maker of NNPC that the portal of the company is yet to open to marketers but only to their own retail stations.
Bad still, a disclaimer on the assertions of Mgbere released earlier today by NNPC on X (twitter) signed by Olufemi Soneye did more harm to the whole situation. He did not present any fact to Nigerians on the true position of the refinery but preoccupied himself calling Mgbere names. It is of the opinion of this article, that the corporation through Soneye should have come out clean and tell Nigerians the true state of the refinery and the type of products that NNPC retail stations are receiving from the refinery because Nigerians deserve to know. Maybe it is the six trucks Mgbere alleged with Kerosene and diesel that were distributed because if it is the 1 million litres NNPC claimed, we then must be talking of 30 trucks. Also, how many trucks have been released since Tuesday and when is the 200 trucks of petrol NNPC promised to be releasing into the Nigerians market everyday going to start?
The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) through its spokesperson Joseph Obele on Thursday said the refinery “is up and running, producing by-products of crude oil” but he did not mention the exact products. Report also has it that the Senate Committee on Petroleum Resources under the leadership of Sen. S.A Kawu Sumaila, on its fact finding mission also saw the plant functioning with petroleum trucks loading at the refinery depot during their visit but yet, the Independent Petroleum Marketers Association of Nigeria through its National Publicity Secretary, Chinedu Ukadike has said that “it finds it hard to believe that everything displayed so far by the refinery was a mirage but that the association will still believe in NNPC until the loading of PMS at the refinery fails to continue in the next few days.” His statement on Thursday that “we are ready to load petroleum products once NNPC reviews its price and is willing to sell to us,” sums up every argument that PMS from the refinery is still an illusion to the public until NNPC is able to come out to tell Nigerians the whole truth without economizing it.
It is also worrisome how
the NNPC is gradually becoming a secret corporation with so much deficiency in transparent communication to Nigerians. Yes, as the refinery has not been working for many years and effort has been in place to make it work, if it is only Kerosene, diesel or any other product that it starts production with, why can’t the truth be communicated to Nigerians since it is a work in progress? As well, if it is the catalytic platform unit (as claimed) of the refinery that needs to be installed and made operational before producing PMS, why not tell Nigerians so we continue to wait as always. Why this progress in error?
As Nigerians, we have heard and suffered enough from the hand of NNPC that nothing should be new to us coming from the sector. So, the corporation should come out and tell us the true position of things and nothing but the truth. They should tell us the section that is currently working in the plant and to what degree. They should tell us the by-products of crude the plant is currently producing and in what capacity. How many litres of PMS or trucks have been released so far and to where? They should be bold to tell us the problem hampering the release into the Nigerian market, the promised daily 200 trucks of PMS and other things Nigerians should know. As the price of petroleum product is still under review, the corporation should also try and come out with reasonable price so that marketers can patronize them in order to boost local refining capacity and reduce import reliance.
Nigerians will not also forget in a hurry, the unstable roles of NNPC in Dangote Refinery, particularly how Nigerians were kept in the dark that wrote me “Unravel Oil Mystery Now: a Letter to Petroleum Minister, Bola Tinubu.” They should therefore be transparent and come out clean to win customers because it is now a deregulated market where any marketer can buy from wherever he likes. Already with Dangote Refinery in place, report has revealed by Nigeria Port Authority on Wednesday that a total sum of 78,800 metric tonnes that stand at 105.67m litres of petrol have been imported into the country in the last five days between November 23 and 28. So the corporation must be on top of its game to join the deregulated market and make a difference.
Nigerians are happy that at least we now have one state refinery working. But the nation would have been happier if it comes with good price that will force other private refineries to beat down their prices further as already seen in Dangote. NNPC should not raise its price above the privately own refineries. That would be a serious faux pas.
Olushola Omogbehin a public affairs analyst writes from Abuja FCT Nigeria
