CLEANSING THE OIL STABLE - POST EXPRESS
olorunfemi ojo
Category: Features
Date of Article: 09/01/98
Topic: Cleansing the Oil Stable
Author:
Full Text of Article:
The recent scrapping of the Ministry of Petroleum Resources by the Federal
Government has heightened expectations that renewed efforts to halt the
lingering petroleum crisis in the country may yield positive results. CHRIS
NDIRIBE (Correspondent) reports.
THE recent scrapping of the Ministry of Petroleum Resources by the Federal
Government did not come to many Nigerians as a surprise. The ministry has
been mired in one controversy or the other since early 1997 when the now
persistent scarcity of petroleum products in the country first reared its
ugly head. Indeed, the ministry which was headed by Chief Dan Etete until
the Federal Executive Council was dissolved by Gen. Abdulsalami Abubakar
drew the ire of the public when the scarcity escalated into a major energy
crisis mid 1997.
Public anger at the time was articulated by prominent Nigerians including
Professor Tam David West, who published his views in full page advertorials
in several of the nation's leading newspapers. West had advised and indicted
Etete over his handling of the ministry and other sundry issues in the oil
sub-sector.
The former finance minister and Etete's colleague under the regime of the
late head of state, Gen. Sani Abacha, Mr. Anthony Ani, also joined the fray
like a wounded lion at the heat of the crisis. Ani, who built a reputation
for being tight-fisted with government funds during the Abacha years
presented the petroleum resources as an Oliver Twist. The former finance
minister painted the picture of a highly profligate money guzzling ministry
which could not render accounts of financial allocations made to it by the
Federal Government. He told Nigerians that between 1994 and 1996, over £3
billion was allocated to the petroleum ministry for the repairs and
maintenance of the nation's four malfunctioning refineries which Etete had
earlier told Nigerians was responsible for the unprecedented shortage of
petroleum products. In specific terms, Ani had declared that in 1994, 1995
and 1996, the petroleum ministry collected N31.3 billion, N44.5 billion and
N47.5 billion respectively. According to him dedicated crude oil and direct
financial allocation amounting to £440 million and £295 million were made
available to the petroleum ministry in 1995 and 1996.
The former finance minister had also told Nigerians that £660 million each
was allocated to the ministry of petroleum in 1995 and 1996. Playing the
saint, Ani demanded for an explanation on how these huge sums of money were
disbursed before fresh allocations could be released to the ministry.
But in a reaction that left Nigerians more confused, Etete had described all
the Ani's claims as hogwash. He admitted his ministry received only £240
million and £274.5 million in 1995 and 1996 respectively. He dismissed all
other claims of allocations Ani said the ministry received and challenged
him to name the individuals who collected the money. Etete accused Ani of
behaving like a super minister insisting that the finance minister had
refused to release the sum of £800 million which was urgently needed for the
repair of the nation's ailing refineries.
However, sources in the ministry absolved Etete of blame in that crisis on
the grounds that he actually predicted the shortage of petroleum products
nation-wide if refined products were not imported to supplement the output
from the refineries. It was learnt his prediction was done on the unhealthy
state of the refineries. Petroleum sector sources confirmed that even though
the refineries are supposed to undergo turn around maintenance every other
year, none of them had undergone the exercise since 1994. Etete was right
about the genesis of the crisis, they insist.
In the heat of the crisis last year, Abacha had issued a 48 hour ultimatum
for the importation of refined products to the country. Though the order was
executed with military dispatch at the time, the ugly situation was not
entirely eliminated. But the nation ploded on until early this year when
matters took a turn for the worse once again.
Oil experts opine that the old problems which led to last year's crisis are
still responsible for the current situation prevailing in the sector. They
point to the fact that the ailing refineries cannot produce enough petroleum
products for local consumption. For instance, the national demand for
premium motor spirit (petrol) fluctuates between 16 million and 18 million
litres daily, the nation's four refineries have been producing about half of
this quantity of the product.
Dr. Joseph Fellah, a senior manager at the Nigerian National Petroleum
Corporation (NNPC), who represented Etete at the Nigerian Guild of Editors
last year, had observed that another serious problem which has worsened the
fuel crisis was the inadequate allocation of crude oil to the refineries. He
maintained that though the maximum production capacity of the refineries was
440,000 barrels of crude oil (bpd) per day, only 250,000 bpd is currently
allocated to them. Experts say this could only yield 13 million litres of
fuel from the refineries when they are producing at full blast. This leaves
a shortfall of between three and five million litres daily.
Other problems which experts have identified as responsible for the
perennial fuel scarcity include product evacuation and smuggling of refined
products.
Nevertheless, some experts see the scrapping of the petroleum ministry as
good riddance to bad rubbish. Indeed, the former managing director of the
Nigerian Liquefied Natural Gas (NLNG), Dr. Ejike Onyia, canvassed the
scrapping of the ministry at a seminar of the Association of Professional
Bodies of Nigeria (APBN), which he addressed last October. He maintained
that this was necessary to create room for efficiency in the oil sub-sector
adding that the ministry was undermining the professional running of NNPC.
Onyia pointed out that the ministry's top echelon was dominated by
non-professionals. He stressed that of the eight directorates in the
ministry, only one was headed by a petroleum expert. The ex-NLNG boss stated
that the situation was always worsened by the fact that the ministry is
rarely headed by professionals in the oil industry.
He further observed that this state of affairs results in only one
individual making contributions from an informed perspective whenever there
is a meeting of the ministry's top echelon.
Onyia also advocated that after the petroleum ministry has been scrapped,
the chairman of the NNPC must have a cabinet status so that he could have
direct access to the head of state. He remarked that when the NNPC was an
independent body, professionalism was the order of the day.
The oil industry expert maintained that too much interference from
government which sometimes uses crude oil allocations to reward its
loyalists, has contributed to the current chaotic scenario in the industry.
Explaining further, he stated that until 1986, the tradition in the oil
industry was for the government to allocate crude oil to oil companies
instead of cash as its own contribution towards the maintenance of the
refineries. He maintained that all these changed under the regime of the
former head of state, Gen. Ibrahim Babangida as many of his cronies were
appointed into the exclusive club of petroleum dealers. Under Babangida,
cash calls, which were always set aside for the maintenance of the
refineries were merged with the federation account. Hence, funds for
maintenance of the refineries were subjected to lengthy bureaucratic
procedures before being released.
Gen. Abubakar who appears to be desperately searching for a solution to end
the protracted fuel crisis seems to share Onyia's views.
Abubakar's decision may have also been informed by other considerations
including the recent reported revelations of massive looting of the nation's
treasury by high government officials under Abacha.
In fact, Professor Sam Aluko, chairman of the National Economic Intelligence
Committee (NEIC), has revealed that some highly placed Nigerians have been
smiling all the way to the bank while the fuel scarcity lasts. He disclosed
that a Nigerian broker gets as much as £100,000 for a ship load of fuel
which is imported into the country.
Also, reported revelations that the ministry was used by Abacha to award
contract to his front companies may have contributed in determining the
Federal Government's decision.
Nevertheless, only time will tell whether the decision would redress the
sorry state of the oil industry in Nigeria which remains the sixth largest
producer of crude oil in the world.
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