Before the end of his tenure in 2007, former President Olusegun Obasanjo sold two of the nation's four refineries at a paltry sum of $751 million to a local consortium. Many concerned citizens, including the workers in the oil industry, kicked against the illegal privatisation of the two refineries.
President Umaru Yaradua probed the sale and found that the sale was singlehandedly carried out by former President Obasanjo in utter breach of the provisions of the Privatisation and Commercialization Act. Consequently, the sale of the two refineries was cancelled and set aside in the national interest.
Former President Mohammadu Buhari resisted the pressure of neoliberal ideologues in and outside his government to sell the four refineries as scraps. Based on the advice of patriotic forces, the Federal Executive Council approved the rehabilitation of the two refineries in Port Harcourt for the sum of $1.5 billion.
In line with the terms of the contract awarded in March 2021 to an Italian company, Tecnimont SPA, the rehabilitation of the 210,000-barrel capacity refineries was required to be carried out in three phases of 18, 24 and 44 months. In particular, the first phase of the contract was to be completed in 18 months, which would take the refinery to a production of 90 per cent of its nameplate capacity.
Furthermore, on August 6, 2022, the Federal Executive Council (FEC) approved the award of contracts for the rehabilitation of Warri and Kaduna refineries to the Italian company Saipem for US$1.5bn. The installed capacities of Warri and Kaduna refineries are 125,000 bbl/d and 110,000 bbl/d, respectively. The project was required to be completed in three phases of 21, 23, and 33 months.
The two contractors that are said to be international experts in refinery maintenance and rehabilitation have not been allowed to explain the breach of the $2.9 billion contracts. Instead of calling the contractors to order for embarrassing the Federal Government, the Group Managing Director and Chief Executive Officer of the Nigerian National Petroleum Company Limited, Mr. Mele Kyari has been shifting the dates for the completion of the rehabilitation of the four refineries.
Let Tecnimont SPA and Saipem speak out!
Instead of relying solely on the Dangote Refinery and Petrochemical Company Limited to solve the crisis of fuel scarcity and hike in the pump price of PMS, the federal government should ensure that the September date for the completion of the rehabilitation of the nation’s refineries of 445,000-barrel capacity is not further shifted. If the contractors fail to honour the new completion date, the federal government should not hesitate to sue them for a serial breach of the contracts.
Let the public refineries and private refineries, including the Dangote Refinery, flood the market with refined petroleum products including PMS.
When that happens, there will be no justification for the incessant hike in the pump price of PMS.
Femi Falana SAN,
The Chair,
Alliance on Surviving Covid-19 and Beyond (ASCAB)