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  • Oil & Gas - News
  • Updated: March 20, 2023

FG, Politicians Drove Oil Industry Into Mess, Says Report

FG, Politicians Drove Oil Industry Into Mess, Says Report

The Centre for the Promotion of Private Enterprise (CPPE) has claimed that the Federal Government and politicians mismanaged the oil and gas sector to the point where there is an ongoing shortage of Premium Motor Spirit, also known as petrol, pipeline vandalism, oil theft, and other threats to the oil and gas industry.

CPPE described the management of the oil business by politicians a failure and emphasised that the government should lessen its sway over the sector and privatise some facilities, including the four refineries currently controlled by the Nigerian National Petroleum Corporation Limited.

“Let’s take the oil and gas sector, for instance, that sector has been a disaster, because it is fully in the hands of government officials and politicians,” the Director, CPPE, Muda Yusuf, said while speaking on the need to fully privatise the oil sector.

“Imagine if operators in that industry were private sector people, paying taxes and doing things efficiently, the sector would not be in the state it is now.

“It would have raked in a lot of investments, bringing in many foreign  and domestic investors, more quality jobs would have been created, and our export earnings would have been fantastic.

"Our investments in gas and others would have gone far.”

Yusuf emphasised that the government's control over the sector's affairs had led to it turning into a platform for favouritism, which was the reason for the current issue.

Whereas occasionally we experience widespread scarcity of petroleum goods, oil theft, pipeline damage, among other things, it was added.

The head of the CPPE emphasised that privatisation might not be beneficial for every area, but he also observed that if the government could identify those sectors where the participants in the private sector had a demonstrable capacity to perform, then it had no business being there.

“This is because if they are there, they will not be efficient, there’ll be a lot of corruption, there’ll be no investments and they will mess it up.

“All these queues we are seeing today, fuel subsidy issues and crises, as well as others, are because the place (oil sector) is in the hands of the public sector.

“The oil sector can work far better than it is currently when managed by the private sector.

"It will work far better. If those refineries were in private hands, would they be moribund for so many years?

"This government has been there for eight years, have the refineries worked?” Yusuf queried.

The Port Harcourt, Kaduna, and Warri refineries in Nigeria have all been extensively renovated over the years thanks to significant funding from the federal government.

For instance, the NNPC stated that the Port Harcourt Refining Company facility would be finished in 18 months when it signed a contract with Tecnimont SPA in April 2021 for a $1.5 billion repair programme.

Also, in August 2021, the Federal Executive Council approved $1.48 billion for the restoration of the refineries at Kaduna and Warri.

At the conclusion of one of the weekly Federal Executive Council sessions held in Abuja, the Minister of State for Petroleum Resources, Chief Timipre Sylva, made this announcement.

Sylva had revealed that the Warri and Kaduna refineries would be renovated over the course of three phases, costing a total of $1.484 billion, and would be done by Messers Saipem SPA and Saipem Contracting Ltd.

The head of CPPE countered that if private sector managers had been in charge of the facilities, the money invested in renovating the refineries would have yielded the expected outcomes.

“Do you know how much we have pumped into those refineries, in terms of Turn Around Maintenance and things like that?

"Do you know how much salaries the people who are staff there are drawing from those refineries?

"We should identify sectors that should be privatised,” he stated.

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