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Why refineries are not operating optimally
#1
‘Why refineries are not operating optimally’







Nigeria’s refineries are operating below their installed capacity of 445,000 barrels per day (bpd) because the  Federal Government controls them, the former President, Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), Dr Louis Brown Ogbeifun, has said.

The refineries include Warri, Kaduna and Port Harcourt 1&2.

In an interview with The Nation, in Lagos, Ogbeifun said the management of the refineries by the Federal Government does not create room for their effective management.  He said the development has made it difficult for the refineries to produce optimally.

The refineries, Ogbeifun said, are managed by the Board of the Nigerian National Petroleum Corporation (NNPC), which is wholly owned by the Federal Government.


Ogbeifun said: “In the event that the Federal Government hands off control of the refineries, the refineries would become truly commercialised. When this happens, it would be easier to review the legal foundation, which is the Act that set up the refineries.”

He said refineries perform optimally in countries where their commercial operation is based on transparency and accountability, adding that state control of the refineries has limited the influence of the managing directors appointed to oversee them.

He said: “How much of the activities do the managing directors of the refineries control? Is there any of the refineries that can embark on projects, without going through the cumbersome bottlenecks that might even end up on the table of Mr President? How could such refineries work optimally under these constraints and challenges?”

According to him, the government cannot use the same strategies to solve the problems of the refineries year in, year out and expect a different result.

Ogbeifun who is also the Chief Executive officer, African Institute for Transparency, Accountability and Responsible Leadership (AfriTAL),  said the repairs of the refineries go through bureaucratic channels, which he claimed affect their output. He noted that no meaningful refinery project has taken place in Nigeria in the last two years.

He said factors within and outside the country are responsible for the problem, adding that the problems can only be solved through collaborations among stakeholders in the oil and gas value chain.
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