Former Vice Chairman of Ibadan South East Local Government has opined that It is important to draw our attention to a critical issue plaguing Nigeria's economy and hindering its growth. I'm referring to the state of our refineries and the urgent need for their privatization.
Former President Olusegun Obasanjo recently voiced his support for this move, and I couldn't agree more. It is high time we take decisive action and put an end to the economic and social crisis caused by rampant corruption in our refineries and the oil sector as a whole.
President Obasanjo's experience with Shell, one of the world's largest oil companies, sheds light on the reasons why privatization is the only viable solution.
Shell declined his offer to run the refineries due to several crucial factors. Firstly, Shell's main source of revenue lies in upstream operations, not downstream refining. This means their interests are better served by focusing on exploration and production rather than refining.
Secondly, while Shell engages in downstream activities as a service, it primarily does so to support its core business. Operating Nigeria's refineries would be unprofitable for them, as the economics of refining have shifted towards larger facilities globally. The scale and efficiency of big refineries make them more financially viable, leaving smaller refineries like ours at a disadvantage.
Thirdly, and most alarmingly, corruption has deeply entrenched itself within our refineries. This corruption not only hampers productivity but also drains our nation's resources. The funds that should be invested in infrastructure, education, healthcare, and other critical sectors are diverted through corrupt practices, perpetuating a cycle of poverty and underdevelopment.
Privatizing our refineries is the only way to break free from this cycle. By handing over the operations to competent private entities, we can guarantee expansion, and introduce efficiency, innovation, and accountability to our oil industry.
Privatization will attract domestic and foreign investments, injecting much-needed capital into the refineries and stimulating economic growth. It will create jobs, enhance technological advancements, and promote healthy competition, ultimately benefiting the Nigerian people.
Moreover, privatization will reduce the burden of endless turnaround maintenance on the government's coffers. Currently, we waste enormous sums of money on maintaining our refineries without achieving any substantial improvements. These funds could be better utilized to address pressing social and economic issues that affect the lives of ordinary Nigerians.
Critics may argue that privatization will result in increased fuel prices for consumers. While short-term price adjustments might occur, the overall benefits of privatization far outweigh this concern. Privatized refineries will operate more efficiently, leading to increased production and reduced importation of refined petroleum products. This, in turn, will stabilize fuel prices in the long run, benefiting the Nigerian people and reducing our dependence on foreign sources.
Privatization of Nigeria's four refineries is an urgent and necessary step toward revitalizing our economy and combating corruption. We cannot afford to let our resources go to waste any longer. It is time for the government to take bold action and invite competent private companies to manage and operate our refineries. By doing so, we will unlock the true potential of our oil industry, create a conducive environment for economic growth, and pave the way for a prosperous future for all Nigerians.