In this interview with Emmanuel Obe of National Point, Dr. Joseph Obele, Chairman of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Rivers State Chapter spoke about the turnaround rehabilitation of Port Harcourt Refinery, removal of fuel subsidy, engagement of expatriates to head NNPC subsidiaries and other sundry issues in the oil and gas Industry.
he Federal Government promised that the Port Harcourt Refinery resume production by December last year when it was expected that the turnaround of the plant would have been completed. But that was not to be because the turnaround is still going on. What is your opinion on this?
You are aware that Nigeria borrowed $1.5 billion for the turnaround rehabilitation of Nigeria’s premier refinery at Alesa Eleme with 60,000 barrels a day production capacity and the second refinery still at Alesa Eleme with production capacity of 200,000 barrels per day. The Minister of State (Petroleum), our brother, Timipre (Sylva) promised us that by December 2022 that the refinery would start operation at optimal or skeletal capacity. He failed. Again, he said that as at December probably by the first quarter of this year. We are almost out of first quarter. Just few days ago, he said again, second quarter. I want to state here that he will definitely fail again: reason being that they are importing from foreign refineries; all that from their business partners. And they are so comfortable importing these petroleum products. Nigeria is one of the cardinal, the core OPEC (Organisation of Petroleum Exporting Countries) nations having non-functional refineries. I am ashamed of us as a nation, that we have a refinery and we abandoned our refinery and we are importing from all the foreign refineries owned by their friends and business partners.
So, we are doubting you, Minister of State Petroleum. We don’t believe you because you are not committed, because you are making profit from importing from foreign refineries. We don’t believe you anymore. So, stop giving us dates until we see. But to the good people of Nigeria, when our refineries start functioning Nigerians would buy fuel less than N80 per litre and we won’t see all these fuel scarcity that we are seeing now. So, we should beckon on them to see that our refineries function at optimum capacity. Good enough, the TAM of Warri is ongoing. The one of Kaduna, they are starting at the end of this year. The one at Alesa Eleme they say it’s at 75 percent completion. But the question is, are they really committed to seeing the refinery functional because they are comfortable importing from foreign refineries owned by their business partners?
Can you give us firsthand information on the situation of the TAM at Port Harcourt Refinery?
Let me put it clearly. The landing cost of this commodity called PMS (Premium motor spirit) popularly called fuel is today over N300 per litre. And government pegging it at N180 per litre, that is to say the subsidy cabal or the beneficiaries of subsidy earn close to N200 per litre of imported fuel. Now, take this, the least volume they bring from mother vessel to a baby vessel is close to 25 million metric tonnes. Now, multiply 200 naira by 25 million metric tonnes. My brother, your children’s children’s children will never be poor. If you are involved in this would you want this subsidy removed?
I have stated it here that managers of Nigeria’s oil and gas sector are so comfortable importing from international market because they have shares, they have rackets and these foreign refineries are owned by their friends. They are not committed to see that Nigeria’s refineries are functional. It doesn’t take rocket science to fix these refineries. It doesn’t take rocket science for goodness sake. But they are comfortable because they are making so much profit importing from the international market. Hence they are not committed.
They lied to us that the refinery is going to commence operation by December, they failed. They said first quarter of this year, 2023 and it’s over. Now they are saying second quarter of this year. I am saying they are also lying. They make it at that time. They are not committed to see the refinery functioning because they have shares and they are making profit from the importation. Hence they are comfortable with that.
Should Nigerians expect higher prices in importation of fuel because we are expecting removal of subsidy by the incoming regime?
The beginning of any policy has ups and downs. By the next two, three months, the budget 2023 provision for fuel subsidy ends by June, mid this year. So, probably by July, fuel subsidy will be fully removed.
Let me tell you what will happen. A few months to the end of fuel scarcity fuel prices will be fluctuating. It will not be normal. But three four months later, I think it will have its way to a reduced better rate to attract Nigerians to see that we all support the removal of fuel subsidy.
If you are in support of retention of fuel subsidy you are an enemy to the Nigerian economy. Last year alone, we spent over N9 trillion out of the N16 trillion that was the yearly budget of the nation on the payment of fuel subsidy, just one single commodity. I think it is not really a good one. We can subsidise education; we can subsidise agriculture; we can subsidise food for our people; not fuel. But we at IPMAN support the removal of fuel subsidy but it should be at the right time. And the big question is, when is the right time? The right time for the removal of fuel subsidy could be when Nigerian refineries are functioning at optimum capacity. If fuel subsidy is removed by then, then Nigerians would buy duel at less than N70 or N80 per litre. But if it is removed when they are still importing from foreign refineries owned by their business partners the price might still be a bit high as it is. So, we should all support the removal of fuel subsidy but at the right time when our refineries are functional at optimum capacity.
Why is there disparity between the prices of fuel bought in Port Harcourt and fuel bought in Lagos?
Journalists have asked me why the price of fuel in other states is about N180,N190 but in Rivers State, it/s over N270 per litre. The reason is that the rate at which NNPC is selling to marketers in Rivers State is different from the rate at which they are selling to marketers in Lagos. Marketers in Lagos are buying N170 per litre. Marketers here in Rivers State are buying at N180 per litre.
Secondly, marketers in Lagos get firsthand allocation whereas marketers in Rivers State get allocation from a third party. They might allocate to a 17-year-old pretty girl that is not a marketer. But all of us marketers would now buy from that young girl. Na wetin we dey see, my brothers and sisters. So, don’t blame us for the rate at which we are selling. The reason is because they are selling to those in Lagos less than what they are selling to us here. And we get secondhand allocation instead of firsthand allocation.
NNPC recently hired some expatriate managers to head some of its subsidiaries thereby sparking protects from Nigerians, who say the appointments contravened the local content Act. What is your reaction to this?
Arising from the passing of the PIA (Petroleum Industry Act) NNPC is now branded as NNPC Limited. That implies that it is now fully commercialized as against the non-profit Nigerian entity of yesterday. So as we speak right now, they are in strictly for business and making profit. Profit making is now their cardinal objective.
So, we saw in the news a few weeks ago that the top management has engaged some expatriates, some foreigners and Nigerians went to the streets shouting here and there why foreigners? Where’s the place of the local content act? And in IPMAN stood up that we endorsed, we supported NNPC top management in the engagement of expatriates. The reason is because when these managerial offices were managed by our brothers, Nigerians, ethnic dominance was the order of the day. If the man from the South or the Niger Delta is the head, all around him there would be his brothers. If the man from the North is the head, all around that office would be his brothers. For you to see the MD (Managing Director) of PPMC (Pipelines and Petroleum Marketing Company Limited) of yesterday it’s like you would celebrate that you have seen God. But today, this expatriate takes one minute for him to pick up phone calls. Before now, if the MD of PPMC picks your call, you would go for thanksgiving. So, we endorse that the foreigners should take up that office.
The second reason is that application by marketers is now online, courtesy of the foreigners. When our brothers were managing those core offices, it would take you six months to apply for one truck of product. Now it takes seven days. You don’t have to make any phone call. From the comfort of your home, you would just apply online and you would get your product. So, we support the engagement of expatriates to head the core areas of NNPC. And I want to state here that those protesting against foreigners taking those offices are friends of the corrupt regime that they want back. Never again are we going back to Egypt. We are out of that and we are out of there. So, the top management of NNPC should keep employing more foreigners. All major offices should be taken over by foreigners. We know ourselves as Nigerians; we know what we can do; we know our weaknesses; and we know our strengths as they concern Nigerian offices, high profile offices of such. We Nigerians can be terrible. These expatriates are so sincere. If the expatriate gives his word, it’s his word. So we don’t want to go back to Egypt. So, we endorse the employment of these foreigners. And they should employ more of them.
On the disparity between the price of products in Port Harcourt and other areas, what is IPMAN doing to curtail this disparity by NNPC?
I told you that a lot of reforms are coming up arising from the foreigners that have taken office. We are applauding and supporting the engagement of expatriates. And I told you a lot of things are changing. So going forward, it’s going to be a good time for Nigerians as it concerns the oil and gas sector.