BREAKING: Forget Dangote,FG: AnotherRefinery Needed

“It is unthinkable that wisdom should ever be popular.” Goethe.

When Buhari rushed to launch the uncompleted Dangote Refinery in Lagos before departing into the black books of Nigerian history, he demon­strated two traits which people like me never thought he possessed when we were prepared to bet our lives on him in 2011 and 2015.

He exhibited selfishness; and he purveyed de­liberate falsehood….CONTINUE READING HERE

Incidentally, it was not just the Dangote Refin­ery he hastily commissioned; the Second Niger Bridge also received the same treatment.

He just did not want any successor to claim credit for any of those projects. But, he did some­thing worse.

He deliberately lied to Nigerians about the re­finery. First, he mentioned in his address that the 650,000 barrels per day refinery is the largest in the world. That was not true. The world’s largest refinery is the Jamnagar Refinery Complex in India – with processing capacity of 1.24 million barrels per day.

It is followed by Paraguana Refinery Complex in Venezuela capable of processing 940,000 barrels per day.

In fact, the Dangote refinery is not among the top five globally.

Additionally, Nigerians were given the impres­sion that the Dangote refinery will supply all our needs for fuel.

Again, nothing can be further from the truth. Even if the entire output of that refinery is sold to Nigeria, there will still be a supply deficit be­cause 650,000 of crude cannot supply the Nigerian market, now estimated at 48-56 million litres a day.

At any rate, the Dangote refinery is only situ­ated in Nigeria; it is not meant to serve only the Nigerian market.

It can supply anybody anywhere in the world as its interests dictate.

There is therefore, no firm assurance that Ni­gerian consumers will always receive supply from Dangote. There is even less assurance that we will obtain supply at the price we want.

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Dangote, a private business, will not turn its back on more money in order to supply Nigeria for less – despite the minority shareholding by NNPCL in the business.

In fact, NNPCL’s stake was pure gift because the majority would always have their way.

Finally, the impression was given that the refin­ery would soon start supplying fuel to the Nigerian market.

We are in the final quarter of the year; and my informers have not reported sighting tankers coming closer to Victoria Island for loading. That tells me something.

I was in charge of distribution for a brewery in the 1980s. The trailers we were going to engage to convey products and empty bottles were already being processed five months before the first load­ing took place.

The refinery will need 10,000 or more tankers to serve Nigeria. Even then, it will still amount to putting all our eggs in one basket. Nothing can be more foolish. It means repeating the same mistake we did with power supply.

Forget the Four FG Scraps

“One thing about conventional wisdom is that it is so often wrong.”

Albert Einstein, 1879-1955.

Each time I read or listen to someone asking why the Federal Government does not repair our four museum pieces called refineries, it occurs to me that this is another explanation why Africans lag behind the rest of the world intellectually.

Our fathers invented the hoe before white men emerged. We are still carrying the hoe around more than a million years after.

We have not changed mentally in terms of being wedded to old and dysfunctional tools and systems. That explains why people still seriously talk about refineries which are at least 38 years old as if they can be cost-effective.

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Many of their spare parts were custom-made by suppliers which have gone out of business or no longer manufacture those parts. Instead of scrap­ping them and starting all over again, we continue to shove billions of dollars down the throats of corrupt contractors for absolutely wasteful Turn Around Maintenance, TAM.

The current attempts will still not work. Just wait until December 2023, when the refineries are expected to start supplying fuel to eager Nigerians.

Real Competition Is The Answer

“A town that cannot support one lawyer can al­ways support two.”

Daniel Boorstin, 1914-2004, American Histori­an.

Given the fact that we no longer have four re­fineries, and the Dangote refinery is the only pros­pect, we are inadvertently creating a monopoly.

It is a costly blunder which will come to haunt us. Additionally, the refinery can only process crude oil – at a time when globally some vehicles are being modified to use gas instead of petrol. And a growing percentage of cars in the future will be Electric Vehicles, EV. Commonsense would dictate that the obvious step is to start another project in a state which is equally blessed with crude and gas.

It was discovered under military administra­tions in the 1990s that Akwa Ibom State’s resource endowments can be characterised as lots of gas associated with oil.

In other words AKS has more gas than oil and can easily support a new and very modern com­plex which can supply fuel, gas and EV batteries.

That was why the Aluminium Smelting Com­pany of Nigeria, ALSCON, was situated at Ikot Abasi to take advantage of the vast gas deposits in the area. It is most unfortunate that ALSCON has become a mirage of what it was intended to be.

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“Ideas are capital; the rest is money.”

That ALSCON failed should however not deter us from trying something else in the same area. What has been lacking so far are two critical stim­ulators.

One are ideas to exploit the abundant resources to provide a variety of solutions to our problems and to create healthy competition which will ac­tually limit fuel prices and guarantee supplies of all energy needs.

Two, private sector capital is needed to partner with the state government to widen the opportu­nities for everyone.

A multi-purpose project in AKS makes more sense than Rivers which is already over-crowded with refineries and LNG projects which are stuck in ancient times and deploying obsolete technol­ogy.

Investment in AKS provides the opportunity to introduce cutting-edge technology allied with abundant human and material resources. Fuel and gas supplies from AKS can more easily reach Rivers, Bayelsa, Abia, Imo, Cross River, Ebonyi, Taraba and Benue States via Katsina Ala than the consignment fron Lagos and it will arrive at lower prices.

The point here is this: we should avoid putting all our hopes on Dangote Refinery alone; thereby creating a monopoly. Only a healthy competition can guarantee that consumers enjoy a fair deal all the time. The new complex will also supply the growing gas market as more vehicles convert to using gas in order to save operating costs.

From information available to me, the Akwa Ibom State Government, AKSG, is willing to part­ner with credible private sector operators for the venture. Apart from that AKS remains one of the safest states in the country today. The people are generally well-educated and welcome non-indi­genes with open arms….CONTINUE READING HERE