A government that is penny wise and pound foolish!

 by Adebola Rayo

Nigeria’s refineries have all fallen to ruin due to several years of neglect by  successive governments in the country.

The Senate Committee on Petroleum (downstream sector), disclosed that the country loses about N719 billion annually due to the comatose state of the Kaduna Refining and Petrochemicals Company (KRPC). The company, which is working at less than 25 percent of its capacity, still spends N12 billion paying staff salaries yearly.


The Managing Director of the KRPC complained that the required ‘Turn Around Maintenance’ for the refinery to work at full capacity, has not been carried out on schedule for years. Over time, governments have promised several things in relation to the oil sector, among which have always been the building of new refineries, and of course the NNPC’s latest promise -existing refineries to work at 90 percent capacity by 2013. Why not 100 percent? And will the fresh promises go the way of its predecessors; down the drain?


Nigeria’s refineries have all fallen to ruin due to several years of neglect by  successive governments in the country. Yet, every Wednesday at Federal Executive Council meetings, they continue to allocate huge sums of money to contracts and projects that Nigerians rarely ever benefit from, or even see come to fruition.


On Wednesday, FEC approved contracts worth almost N27 billion but the one which really stood out was the allocation of N168.4million for the purchase of 2 ferries which are intended to create 23 jobs. Compared to the other sums allocated to various projects, N168.4 million isn’t really much, however to what end will this money be used? The ferries have a seating capacity of 45 and are intended to ply the River Niger, to ease the transportation problems of Nigerians, the minister of information said. 2 ferries that can carry no more than 90 people at a time, in a country of 160 million people with transportation problems? The poor maintenance culture in the country also probably means that the ferries will be run down in no time.


For years the country has wasted money on irrelevant projects such as the above, wasted money importing refined crude which we exported in the first place, wasted money paying refinery workers who are not working to capacity – not because they don’t want to but because they can’t due to the situation of the refineries. Yet, the government has neglected the things that really need to be done.


If the refineries were working at full capacity, Nigeria would have no need to export crude oil for refining and re-import same. The cost of petroleum products would not be as high as they are, to the detriment of the masses. There would also be no issue of fuel subsidy or fuel subsidy removal. If the government makes the right investment decisions by overhauling all existing refineries as soon as possible, and building new ones, it could be making so much more money than it is trying to save with the fuel subsidy removal.


The president has advisers, among them economists who should know these things and try as much as possible to take the paths that would inflict the least suffering on the citizens of the country. It will be a long time before Nigerians, who are confronted daily with government waste and poor decisions, even begin to believe that the government might truly mean well by the fuel subsidy removal as it has tried to convince them that it does.

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