Private Refineries? Never! Unless…

The hopes of millions of Nigerians for the good life will remain compromised so long as both the media and the intelligentsia consciously or unconsciously collude with government to prey on the gullibility and apparent helplessness of the masses. The role of serious media is to inform and educate and by extension act as watchdog and protector of our civil liberties against thieves and oppressors in government. The extent of success in these roles will be determined by the sincerity and the level of knowledge which are brought to bear on their functions!

For example, it requires unusual courage for of a media house to insistently to publish unsavoury truths about a government or private concern on whom the same media house depends for its survival. On the other hand, the veracity or alleged impact of published information may also remain suspect, if poor remuneration and welfare attract mainly the intellectually half-baked and people of dubious characters to media houses. Low wages and unpaid arrears of salaries will increase the propensity of practitioners to rationalize and actively seek for ‘brown envelopes’ from anyone desirous of publishing favourable information or the restriction of negative news about their activities.

We note the axiom that ‘any event or action that is not reported or published in the media did not happen’ remains eternally true. In this regard, if the choice of what will be published depends on the size of the ‘brown envelope’, the trust of millions of our countrymen on the altruism or good intentions of the press will be misplaced as miscreants in both private and public sectors may actually be robed as angels by the media.

It is no surprise, therefore, that there is a dearth of investigative journalism in our country; the content of most media publications are often verbatim reproductions of press releases from the private and public sectors; our largely uneducated and simple citizens are left to decipher, if they can, the carefully selected reports and news that they read in the print media or hear and see in the electronic media.

The issue of public expectations with regard to the establishment of private refineries provides a good pinhole to evaluate some of the above implications. My attention was drawn to the lamentations and expressions of renewed hope by the current Group Managing Director of the NNPC in several media recently on the issue of new private refineries; even supposedly enlightened Nigerians will believe that the 18 licensees for new refineries are actually the villains and the enemies of the Nigerian people after the uncharitable aspersions on their motives, by the media!

In the Nigerian context, newspapers do not enjoy greater intellectual respect than the Guardian, yet their editorial of the 24th April titled “The Proposed 2 Refineries” is a case in point of an unexpected shallow and simplistic evaluation of a serious problem, the solution of which portends great benefits to our nation. The treatment of the report by other newspapers and media was no different from the Guardian editorial.

Invariably, all the reports latched on the NNPC’s Alhaji Abubakar Yar’Adua’s allegation that “… 16 out of 18 companies that were licensed … in 2008 merely used the licenses as a launch pad to seek contracts for crude oil export… they were not committed to build refineries…”.

The Guardian editorial quickly commended the NNPC for its self indictment and the courage to tell the public that the licensing arrangement was a failure; the editorial proceeded to give kudos to the government for rejecting the licensees’ selfish motive for allegedly demanding 100,000 barrels of crude oil for export, and in a fit of righteousness proceeded to recommend that sanctions be meted to the licensees for non-performance which amounted to “deceiving the government and the people of Nigeria …” especially if an investigation which the Guardian recommended reveal that “the companies do not possess the qualities and capabilities they laid claim to, at the onset of their application!” “Such proactive actions,” the editorial continued, “can serve to deter other companies from taking the country for a ride”.

Such expressions of patriotic zeal, one may conclude, but what is the reality? The truth, of course, is that in a bizarre twist of facts, the villain has become the victim! To start with, we should ask the government what the conditions for the licence were! Did the government just issue licences without verification of the abilities, capabilities or fund availability of the applicants? If this was the case, then, who is to blame? If, however, they actually carried out an evaluation of competence and ability, then, how come the government evaluation team failed so woefully? Who is actually deceiving the good people of Nigeria? The licensees or the government and its agents? In this case, who should be sanctioned or reprimanded as demanded by the editorial? The licensees or the government team?

Indeed, if the 18 licensees demanded 100,000 barrels of oil daily as alleged, the question is, how many current beneficiaries of oil blocks and crude allocations have expressed an interest in establishment of refineries? Furthermore, are these beneficiaries exempted from the despicable “interest in making easy money rather than filling a yawning gap in the country’s oil industry?”

If the so-called oil majors and other beneficiaries of oil industry over the years refused to establish refineries, surely our angst and criticism should first be directed at them rather than the 18 new licensees, who are yet to realise a kobo but are expected to borrow and commit funds often in excess of over $500m to refineries that may not generate sufficient profit to pay back the loans. In any case, which bank is going to lend such huge funds for an investment which would be subject to price control or regulation by the government, even if subsidies will be paid to such investors 3-6 months in arrears?! Furthermore, with the crude oil price at almost $120/barrel, the level of subsidy must now be equal to over 100% of the ex refinery cost, and investors may have to borrow from Nigerian banks with current interest rates above 20% in order to maintain sustainable cash flows until subsidies are eventually disbursed at the whims of government!

I have consistently decried our deliberately selfishly skewed monetary policy, particularly the adverse and destructive impact of the substitution of liberally supplied Naira for our Dollar export revenue from crude oil in this column. This suicidal arrangement is responsible for the failure of government’s deregulations of the downstream sector of the oil industry, and also responsible for the need for increasing subsidy values with increasing crude oil prices; a veritable paradox in view of the favourable potential on our Dollar reserves and exchange rate of such fortuitous price movement.

This crime against Nigeria is also responsible for the acclaimed so-called stability of the Naira when, in fact, a significant appreciation with attendant salutary benefits should be the realistic expectation! The fact that the Guardian editorial under reference failed to recognize these realities can only be the result of a gap in knowledge, but it may have had the effect of misleading millions of Nigerians on the identity of the victim and villain in the refinery impasse!

SAVE THE NAIRA, SAVE NIGERIANS!