A sector that retains reviving what has repeatedly failed, whereas resisting what works, isn’t trapped by destiny however comforted by collapse. PETROAN’s newest outburst exposes simply how invested some pursuits stay in Nigeria’s ritualised dysfunction.
By Abiodun Alade
Nigeria’s oil and fuel sector has endured many seasons of noise masquerading as advocacy. From time to time, strain is utilized not in pursuit of reform, however in defence of habits which have outlived their usefulness. The newest episode is revealing not as a result of it’s novel, however as a result of it exposes, with uncommon readability, the discomfort of lease searching for intermediaries when real change threatens acquainted margins.
That discomfort has lately discovered expression within the agitation by the Petroleum Products Retail Outlets Owners Association of Nigeria over feedback made by Bayo Ojulari, Group Chief Executive Officer of the Nigerian National Petroleum Company Limited. In demanding his resignation, PETROAN has inadvertently illuminated a deeper drawback in Nigeria’s petroleum political economic system: the resistance of entrenched intermediaries to reform that narrows the house for simple lease.
Ojulari’s offence was not misconduct. It was candour. He noticed, accurately, that the Dangote Petroleum Refinery has supplied respiration house at a time when authorities owned refineries are shut, and that the NNPC mustn’t rush again into the acquainted ritual of pouring hundreds of thousands of {dollars} into turnaround upkeep for services which have develop into monuments to waste. This isn’t heresy. It is prudence.
For 1 / 4 of a century, Nigeria has chased the mirage of refinery rehabilitation. Public information counsel that between $18 billion and $25 billion has been spent on turnaround upkeep and rehabilitation of the 4 state owned refineries, with little to point out for it. Like the abiku of Yoruba lore, these refineries are revived with ceremony, solely to relapse nearly instantly. Working at the moment, dying tomorrow. To insist that this cycle should proceed, no matter proof, isn’t patriotism. It is sabotage dressed as concern.
PETROAN’s response is due to this fact instructive. In a latest assertion, its spokesman, Joseph Obele, described it as “most worrisome” that there was no urgency to restart the Port Harcourt Refinery as a result of Dangote is assembly present gas wants. The affiliation went additional, threatening to foyer civil society {groups} and pursue authorized choices to pressure the removing of the NNPC GCEO ought to the refinery not resume operations by March 1. This isn’t coverage engagement. It is strain politics.
Why would a physique of outlets, whose enterprise mannequin relies upon largely on shopping for and reselling merchandise refined elsewhere, be so hostile to home refining capability? The reply lies in incentives. Domestic refineries compress margins. They cut back arbitrage. They expose inefficiencies that thrive in shortage. For a long time, gas importation and the dysfunction it inspired created house for unearned earnings throughout the worth chain. Local refining threatens that association.
History affords a helpful parallel. In Mancur Olson’s traditional work The Logic of Collective Action, he explains how small, organised curiosity {groups} typically prevail over the broader public curiosity as a result of they’re higher motivated to defend slim positive aspects. PETROAN’s conduct matches this sample. It speaks loudly, typically, and with confidence, however for whom does it actually converse?
It can also be price recalling PETROAN’s posture throughout earlier durations of misery within the sector. At moments when the nationwide oil firm was accumulating unsustainable obligations, remitting little or nothing to the Federation Account and absorbing monumental prices, commendations flowed freely. Laurels had been dished out even because the system bled. That period ended with the Federal Government writing off substantial money owed, together with about $1.42 billion and N5.57 trillion after reconciliation. Nigerians paid the value for that indulgence.
During the years when Nigeria’s petroleum sector was pushed to the brink, PETROAN regarded the opposite means. The report is evident. The nationwide oil firm captured your complete worth chain, seizing crude exports, monopolising refined product imports, after which forcing the Federal Government to borrow an estimated N500 billion month-to-month to maintain opaque subsidy claims. By controlling practically 90 per cent of the roughly $3 billion in month-to-month crude proceeds routed by the Central Bank, and mixing this with subsidy funds and different shocks, fiscal house collapsed, driving the federal government into huge Ways and Means financing.
At the identical time, refinery rehabilitation grew to become an trade with out output. About $10 billion was spent over a decade on upkeep with nothing to point out for it, not even a litre of petrol. An additional $3 billion was later securitised towards future crude gross sales for yet one more failed restore cycle, a sum that might have delivered dozens of modular refineries. Even after the Petroleum Industry Act prioritised Domestic Crude Obligation, compliance remained elusive, whereas Nigeria continued to burn scarce overseas alternate importing sub customary gas right into a system with no purposeful midstream. These weren’t marginal errors however a enterprise mannequin that plunged the nation into disaster. Throughout all of it, PETROAN’s voice was conspicuously muted, beneficiant with reward the place scrutiny was required.
This is why the present agitation rings hole. Reform all the time unsettles those that prospered beneath dysfunction. President Bola Tinubu’s administration has signalled, by phrases and choices, that it intends to interrupt with the outdated script. Ojulari’s mandate at NNPC is evident: business self-discipline, effectivity and profitability. That mandate can’t be reconciled with infinite rehabilitation theatre.
There is one other uncomfortable query PETROAN has not answered. What worth does its management deliver to the petroleum sector past tv appearances and press statements? Serious enterprise management is measured in property constructed, jobs created and worth added. Publicly accessible info means that among the corporations related to PETROAN’s management are modest in scale, with restricted mission footprints. Allegations and controversies reported within the public area round a few of these entities, whether or not within the energy metering house or elsewhere, solely reinforce the necessity for warning in elevating ethical authority. Perhaps PETROAN’s members would do properly to look at the information of those that converse of their title, earlier than an affiliation meant to symbolize many is lowered to the non-public property of some, and recast as an adversary of the general public curiosity.
This is to not say that retailers don’t have any position in coverage debate. They do. But affect have to be earned by perception, integrity and alignment with the nationwide curiosity. Threats and ultimatums betray a insecurity in argument.
Nigeria stands at a fork within the highway. One path leads again to ritualised waste, institutional failure and the consolation of acquainted inefficiencies. The different results in native capability, competitors and a petroleum trade that lastly works for Nigerians. The Dangote Refinery isn’t a silver bullet, however it’s a sign that the outdated excuses are dropping credibility.
PETROAN’s nuisance worth thrives solely when reformers flinch. President Tinubu has proven little urge for food for reasonable blackmail. Ojulari enjoys his confidence for a cause. The activity earlier than NNPC is simply too essential to be derailed by these nostalgic for a damaged system. If PETROAN needs to be related on this new period, it should evolve from noise to nuance. Otherwise, historical past will bear in mind it not as a defender of shoppers, however as a footnote in Nigeria’s lengthy battle to flee the tyranny of waste.
Abiodun, a communications specialist writes from Lagos
