OVER the years, Nigerians have witnessed a lot of haze over the Turn-Around Maintenance, TAM, of the government-owned refineries in Kaduna, Warri and Port Harcourt. It has been particularly difficult for Nigerians to unravel just what exactly is keeping the refineries from working. This is moreso when they have heard of the huge amount of money periodically budgeted for the TAM without the refineries functioning at optimal capacity. The problem of the refineries took centre stage in January 2012, during the fuel subsidy removal protests. The protesters had, among other things demanded for the privatisation of the refineries and for the government to hands off their management. Consequently, one of the measures the federal government took to assuage the feelings of the masses was to set up a National Refineries Special Task Force chaired by Kalu Idika Kalu, former minister of finance, to come up with recommendations on how to ensure self-sufficiency of petroleum products in Nigeria within a strong framework in the shortest possible time.
The committee’s terms of reference included among others, to, without prejudice to the on-going programme of rehabilitation and turn-around maintenance of the Port Harcourt, Warri and Kaduna Refineries, and the building of greenfield Refineries, conduct a high level assessment of the existing refineries, review all past reports and assessments and produce a diagnostic report complete with a change journey map; review the operations of the Port Harcourt, Warri and Kaduna Refineries, with a view to improving efficiency and commercial viability. The committee was to also work with a world-class firm to audit the finances of the refineries and produce audited accounts over the past two years ending on December 31, 2011. The taskforce was also mandated to design a template for key production/management-critical performance indicators to be tracked on a periodic basis for ministerial review; design an automated information work bench, to monitor the performance of the Port Harcourt, Warri and Kaduna refineries on an online basis; review all licenses issued for new refineries in Nigeria and assess their operational, technical, and financial readiness; seek new ideas and design financial models across the value chain for the building of adequate capacity for meeting local demand for petroleum production; design a blueprint for public & private partnerships, PPP, to build small, medium to large-scale greenfield refineries across Nigeria. Moreover, it should design investment models and a road map to self-sufficiency in local production of petroleum products in Nigeria, as well as produce a report, complete with timelines and milestones within the next 60 working days.
Suffice it to say that the task-force submitted its report since November last year and it must be lying prostrate in one of President Goodluck Jonathan’s shelves giving the impression that not much is expected from the outcome of the report. However, one of the committee’s recommendations is that the refineries should be privatised. But the federal government is not doing that. Instead, it is pumping another money into TAM of the refineries without resolving the germane issues that had rendered the refineries ineffective even when their TAM was done in the past. This is why the editorial board of the Realnews decided to examine some of these issues which have rendered our refineries inefficient in our cover story this week entitled Maintenance of Refineries: Endless Drain of Public Funds. It was anchored by Pita Ochai, who is fast becoming our in-house authority on economic issues. Enjoy it.