Is there any relationship between the current petrol scarcity and the plan to remove fuel subsidy especially on PMS?
Well as far as I am concerned, there is no relationship. One of the principal businesses for the existence of government is to provide subsidy for its citizens.’ By my own definition, subsidy is a universally accepted economic pain cushioning concept. It is accepted globally. It is to reduce economic pain and to that extent, if subsidy is not working in Nigeria that still cannot invalidate the universal definition of the concept of subsidy. Based on my definition, why I said government principally exist because of subsidy is because any country you go to and hear that the government is providing subsidy on transportation, hospitals, education, healthcare centers what it means is that the government of that country is providing subsidy on the health sector.
Aside from the current scarcity, what are the other implications of the importation of dirty fuel on the oil sector?
First of all, the current scarcity is an embarrassment to Nigeria. It has caused a lot damage to vehicles and health of Nigerians. As far as the dirty fuel is concerned, it is an insult to the Nigerian oil and gas industry and embarrassment to the image of Nigeria amongst the committee of nations. Right now, Nigeria is a member of Organisation of the Petroleum Exporting Countries and as I speak right now, the person supervising that very powerful cartel is a Nigerian, Alhaji Sanusi Barkindo. When you have that calibre of personality presiding over a powerful cartel like that and there is importation of dirty fuel in his country, it is an embarrassment that we cannot refine fuel internally. Then we still could not import the right product with the right verification. It is a colossal embarrassment to the Nigeria oil and gas industry.
Can the adverse effect of this dirty fuel be quantified financially?
Well when you talk about quantifying it financially, we can come up with estimates. The estimation is still going on because so many things are happening and still happening.
By the time they are fully collated the estimates, the necessary authorities will present the aggregates. The losses can be expressed in huge numbers.
Have there been instances of this kind of situation in the past?
Yes in the days of Abacha (the late for military dictator, Sani Abacha). we experienced something close to this but the damage and disgrace was not up to this. In the days of Abacha some adulterated fuel got imported. The fuel had a foul smell and it was pungent to the nose. In other words, it was dangerous to human beings. The fuel was not damaging cars like this, but what we are experiencing now is dangerous to humans and damaging our vehicles and it has also damaged the storage facilities of depot owners and retail outlet owners called filling stations.
What measures should be put in place to avert a recurrence of this situation?
First of all, before the measures are put in place, let there be an acceptance and national apology. The reason I am saying this is, unless you accept that you are wrong, you will not be able to put the necessary measures in place that will prevent the future occurrence that caused this serious calamity because up till this moment, there is still a trading of blame and because of this nobody has directly accepted responsibility for this wrong action.
As far as people like me are concerned, Nigerian government, through Nigerian National Petroleum Corporation through the Nigerian downstream and mid-stream, was saddled with this responsibility.
Whoever they decided to contract for the fuel importation is secondary. On this angle, the Nigerian government through the NNPC is meant to apologise to Nigerians.
They need to put the control mechanisms in place. We have three control mechanisms. We have the preventive, detective and corrective control mechanisms. If the preventive control mechanism has been working, it would have prevented carrying of the adulterated fuel from leaving the point of loading before coming to Nigeria. Because that could not be prevented that was why those vessels got loaded, shipped and got to the shores of Nigeria. Even when they got to the shores of Nigeria, the detective control mechanism could not detect that the bad fuel had been imported and because of that, the bad fuel was discharged into our depots in Nigeria and were moved to filling stations.
Even when they got to the filling stations, it was not detected and it started causing damage and Nigerians started crying, that was when NNPC responded after more than 72 hours. All the mechanisms failed, even after they responded, they could not get corrective measures. All the control mechanisms collapsed. Moving forward after the apology, they must take steps to make they work.
Furthermore, for the preventive mechanism, there are quality tests and quality assurance to always take place from the point of loading because if they had done that and carried out the investigation that it was a bad fuel, they would have prevented it. Even when it landed in the shores of Nigeria, it would have been detected and halted at that point. They would have released what they call the “strategic reserve.”
How can you relate this situation to the fact that Nigeria’s refineries are dormant?
The principal reason why this happened is because of the dormancy of our refineries. Because if we were to have functional refineries, we would have first of all got crude oil within Nigeria from the well-head which we call the Christmas tree within Nigeria. We will move it through the pipelines to our refineries within Nigeria and we are supposed to have quality control checks. This disgraceful act took place because our refineries are not working.
The worst part of everything is that refining is basic and elementary chemistry. Everything has to do with the principle of boilers, estimation columns, fractioning towers because these refined products come out in fractions and they use a principle called “temperature differential” and at a particular temperature cooking gas will come out, at another temperature, petrol, diesel, kerosene will come out.
As far as I am concerned, the refining of crude oil is not as complicated as heart surgery or kidney transplant or even Cesarean section. If there is a mistake in any of these operations, the human being will die but if there are errors in refining there are mechanical tools to correct the mistakes.
If China, Brazil, Malaysia have state owned refineries. Libya, Iran and many non-oil producing countries have refineries. Are you saying those countries and their leaders fools? If they are not fools so who is the fool here?
There have been accusations and denials about the exact importer(s) of the adulterated petrol. What will you say about this?
As far as we are concerned, if you are customer or consumer, you don’t need to know all the processes that involve the refining of the products to be delivered to you for consumption. We should not know the logistics, trade links of all the production processes. One thing is clear, as far as Nigeria is concerned, the Nigerian government through the NNPC, who is the sole importer of refined petroleum products and to that extent, whoever they must have been contracted to bring and get the petrol delivered to us is their business.
Many Nigerians are not okay with the fact that no one has been sanctioned for this situation. Do you share their views on this? Why?
As for me, we are still at the stage of gathering and collating information. It is too early to start sanctioning. After all the activities, investigations and audit have been carried out, we would know who committed what offence then necessary punishment will be carried out for the sake of national interest.
How has smuggling contributed to the shortage of petroleum products in Nigeria?
I hear people say it is because there is smuggling that is why the Nigerian government wants to increase the prices of petroleum products. Even if there is smuggling it is not up to 0.000001%’. This is my explanation. I hear that subsidy has to be removed because petrol is cheaper in Nigeria compared to surrounding countries. I feel ashamed of our leaders. So does it mean because petrol is cheaper in Nigeria, it should increase the price of petroleum products to punish its citizens.
How can Petroleum Industry Act help in curbing what is happening in terms of this contaminated fuel and fuel subsidy generally?
First of all, the Petroleum Industry bill at a point was rushed when it was brought up. What some of us expected was that the necessary authorities were supposed to congregate oil and gas journalists, accountants, economists, lawyers, engineers and environmentalists. All these oil and gas experts are supposed to come up together and look at the document. Because when you hear the word ‘production’ an oil and gas engineer sees it differently from an economist point of view.
If you have all the experts in one place to analyse and agree on the document before passing it, they would have made sure everything was put in place by making sure that Nigeria becomes an import dependent country. They did it on de-regulation and presented a fake picture to Nigerians and immediately the petroleum industry bill was passed. Let them show us any investor that has come from the time they passed the bill into law.
The investors are not coming and the reason why they are not coming is because they are experiencing what we call “business climate hostilities”. Instead of investors coming to Nigeria ‘International oil and gas company they are divesting out of the land and swamping oil and gas assets’ and that is very bad for Nigeria.
(PUNCH NIGERIA)
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