Why Nigeria’s refineries will never work – Obasanjo

Former President Olusegun Obasanjo has expressed some doubts about President Bola Ahmed Tinubu’s recent declaration that the Port Harcourt refinery would be fully operational by December 2023.

In an interview with The Cable Online Newspaper, Obasanjo emphasised his belief that the nation’s refineries would never function efficiently as long as they remained under government ownership.

Drawing on past experiences, Obasanjo shared insights into the challenges facing Nigeria’s refinery sector.

He recounted a crucial meeting he had with representatives from Shell during his presidency, where he proposed handing over the refineries to the oil giant for management.

“Someone told me Tinubu said refineries would work by December. I told the person the refineries would not work. This is based on the information I received from Shell when I was president.

“He said, Do I want to hear the truth? I said yes. He listed four reasons. One, he said, is that Shell makes its money upstream, and that is where its interest lies. Two, he said they only do downstream or retail as a matter of service. Three, he said our refineries would be bad business for them and that globally, companies are going for bigger refineries because of the economics of refineries. Four, he said there is too much corruption in refineries.

“I thanked him for his honesty. I knew we had a big problem on our hands. I had virtually given up hope for the refineries when God performed a miracle. Aliko Dangote and Femi Otedola approached me and said they would be interested in buying two of the four refineries.

“They said they would buy a 51 percent stake in Port Harcourt and Kaduna. I was over the moon. I said, finally, that this burden would be taken off the shoulders of the government. They offered $761 million and paid in two instalments. Unfortunately, Umaru (President Yar’Adua) cancelled the sale and returned the refineries to NNPC. Today, we are still where we were.”