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Buhari And The Oil Sector Rot By Peter Claver Oparah

The Nigerian oil sector is a putrid mess. If it is not a huge rot, it will not be able to fulfill the insidious role successive governments have penciled down for it; to sustain the gargantuan corruption complex their members and enablers feed from. As we speak, Nigerian officialdom does not know the quantity of petroleum products we consume and the figures keep changing like a rolling dice; depending on what ends governments want to achieve.


As a ruddy warning to incoming President Muhammadu Buhari, the nation is presently locked down by a power and energy crisis. As the country braces up for the end of the unproductive sixteen years of PDP rulership of Nigeria, what better way to advertise its grand failure and present a bouquet of challenges to Buhari than that Nigeria today is plunged into pitch darkness due to the failure of the power sector and a protracted fuel crisis had forced Nigerians to barely trudge on the change they excitedly procured on March 28 to walk through a very difficult patch in the country's troubled history? 

For the purpose of this report, I shall concentrate on the fuel crisis and how it presents Gen. Buhari with the arduous task of breaking the embarrassing circle of incompetence that hobble the country's oil sector and make Nigerians feel relieved from the strictures imposed on the country by the deliberate mismanagement of the oil sector to exert gargantuan profit for our corrupt leaders and their minions. Nigeria, being the sixth largest producer of oil in the worth, has no business being constantly embroiled in excruciating fuel crisis. Nigerians have no cause being made constant victims of a fuel politics that is deeply rooted in corruption. But the fact remains indisputable that the oil sector hosts the very tap root of the huge corruption complex that has been nurtured and grown into a domineering facet of our national life. 

The huge manipulation of the country's oil sector is so intricate that unknotting it will certainly not be an easy task but Gen. Buhari is eminently positioned to lead this arduous task. He has superintended the oil sector as Minister of Petroleum and has been a Head of State so he will not be in a strange environment as he moves to untie the knot of corruption with which the oil industry has been shackled since the era of Ibrahim Babangida. What more, when Buhari was the oil minister, the nation was able to conceptualize and build four refineries that elevated Nigeria to the pantheon of exporters of refined petroleum products. It speaks of how much water has passed under the bridge that today, Nigeria fully depends of imported petroleum products to survive. This Buhari must reverse and reversing it means the unshackling of a thick cartel of freeloaders that have sank their claws deep in the badly ran oil sector to survive. Thank God, Buhari possess the requisite integrity and core competence to take up this Herculean task and this is one of the principal reasons Nigerians massively voted for him on March 28.

The Nigerian oil sector is a putrid mess. If it is not a huge rot, it will not be able to fulfill the insidious role successive governments have penciled down for it; to sustain the gargantuan corruption complex their members and enablers feed from. As we speak, Nigerian officialdom does not know the quantity of petroleum products we consume and the figures keep changing like a rolling dice; depending on what ends governments want to achieve. It was so bad that when the outgoing National Assembly sought to throw some insight into the workings of the oil sector during the last subsidy crisis, a shocked nation watched as different conflicting statistics of how much oil Nigeria consumes, how much the country pays for importing refined products, how much of the so called subsidy the country pays, were bandied. It was a rude shock that as many people as were invited for the inquest, so were the statistics reeled out. 

Till date, there is no agreeable fact sheet guiding the operation of the oil industry and that was enough to demonstrate the chaos that pervades the operation of that critical   sector. No one knows for sure how much petroleum products are imported and who imports them. Nigerians don't know how government arrives at its bogus subsidy claims and how these relate directly to the operations of the petroleum sector. But the government, in its eagerness to pass these costs, traceable to corruption and incompetence, to the long suffering Nigerian masses, bandies whatever figure that best suits its allies and cronies who have invaded the oil sector and made it a prodigal feast table to the detriment of Nigerians. What happened during the fuel subsidy crisis was instructive as huge figures were paid to ghost companies with no traceable proof of importing fuel and the costs passed to Nigerians as subsidy. What is even happening in the kerosene and diesel components of the industry is much more shocking! 

As at today, Nigerians don't know the true state of their refineries, their operational capacity at present and what best measure to take on them. As at today, Nigerians are kept in the dark about the true amount of oil we produce each day, how much is exported and how much oil are stolen by ubiquitous tendencies that have their roots deeply sunk in the corridors of power. Nigerians cannot safely vouch for any of the figures the minders of the country's oil sector push out at any given time and in thus scrambled state, the much-sapped citizenry becomes an exploitable pawn that is constantly exerted through such excruciating fuel crises as we have today to pay for the huge corruption and lax that obtain in the oil industry. This is why today Nigeria is locked down in a needless fuel crisis and Buhari should start from there to address the hefty rot that has been brought to pledge the sector today.

But Buhari has a task to cleanse this sordid sector and free long suffering Nigerians from the clutches of the exploiters that have found a haven in this viscerally shambled sector. He must have gotten all the background details he needs to hit the ground running as soon as he is inaugurated on May 29. With his huge and expansive experience as a former Head of State and a former Petroleum Minister, he knows where to strike in the interim to loosen the clutches of the decibel that has entrapped the sector. He has a long term appreciation of what to do to arrest the colossal drift in the sector. I don't need to counsel him but I think I can just point out some road maps my restricted ken can fathom in starting this hard task.

Gen. Buhari must start off by taking an inventory of the country's oil sector to give us a measurable picture of what exists there so as to tailor to our own huge expectation of him as it pertains to the sector. Such inventory will reveal such critical statistics as; how much fuel, kerosene and diesel the country consumes each day, how much, if any, our wobbling refineries produce, how much we pay for the petroleum products, how much it will cost us to get our refineries back to work so as to find out if it will be much more convenient selling them off and ploughing the money back to more worthwhile ventures. The inventory will also calculate the cost of importation as against the cost of refining locally so as to know which option best suits our people and their economic value, how much crude do we lift each day and how much do we sell, how much is stolen and how much is preserved for whatever purpose that must be clearly stated.

The inventory must find out if we are really paying subsidy we cannot manage from the accruals we get from selling crude to countries that refine and sell back to us or whether by adamantly sticking to wholesome importation of petroleum subsidy, we are merely subsidizing official corruption and incompetence.  Is building and sustaining refineries such a rocket science that Nigeria should not attempt to delve into it? The inventory could be far-reaching but at the end of the day, the government will have infallible statistics to plan the intervention it proposes to do in the oil sector with the sole purpose of making the sector work for the interests of Nigerians and not the impediment it constitutes at present.

I don't subscribe to complete government divestment in the oil sector. I don't agree to the free market bait of government completely handing off the building and sustenance of refineries and I feel the Buhari government should seriously look into building new Greenfield refineries in various parts of the country as a drive to private investment in the industry. The need for government involvement here is not necessarily to spurn private involvement in the industry as being espoused by free market theorists but to spur the private sector to invest in building refineries and compete for economic space with government interests in the sector and most importantly not to abandon the citizenry to the exploitative hands of private investors. I believe that as government starts building refineries and freeing Nigerians from the nefarious grips of fuel importers, those desirous of investing in the oil sector will move away from fuel importation to building small and medium scale refineries that will drive a revival of the refining sector of the oil industry.

I know the outgoing government is throwing a bait to Buhari to completely do away with the so called subsidy. Buhari should not fall for this booby trap. He has to do the needful first, which is taking the aforementioned steps to clear the thick cobweb that shrouds the industry. He has to also probe the NNPC and determine its real relevance in light of its egregious failures to Nigerians and the massive corruption that trails its operation. If he does all these, he will be on very sure stead to start the recovery of what remains of the badly managed oil sector and also the re-positioning of our oil-dependent economy for the greater good of all Nigerians.


Peter Claver Oparah

Ikeja, Lagos

E-mail: [email protected]