STATE OF REFINERIES

A Ruling Class Sabotage

(By Chinedu Bosah)

Refineries can never work! That was the slogan repeatedly said by Obasanjo and his gang. Why? They said the government could not manage refineries. But they should be reminded that Venezuela government runs over 8 refineries such that it does not only export crude oil, it also exports refined products (fuel, diesel, etc). In Nigeria, government has become so irresponsible that its only pre-occupation is to rig election and massively loot treasury.

Both locally and internationally, crude oil products are major sources of energy and thus, the refineries and their optimum efficiency are as important as the crude oil itself. Pathetically, Nigeria, the sixth producer of crude oil cannot operate its refineries optimally. It has only 4 out of over 200 refineries in the world, and for decades cannot run it efficiently.

In line with the privatisation malady, over 84 enterprises have been sold to private investors most of whom are Obasanjo associates and cronies. For decades, government claimed to have spent hundreds of billion of naira on maintenance of the four refineries (Port-Harcourt (2), Warri, and Kaduna). Yet, none could work optimally. For example, government under Obasanjo spent N140.8 billion ($1.1 billion) in the maintenance of the Port Harcourt and Kaduna refineries during the four years of his second tenure. While these same refineries were initially sold for a paltry sum of $721million in the last days of the administration to Bluestar Oil Service Company. Bluestar Oil Consortium is comprised of Dangote Industries Limited; Transcorp, Zenon Petroleum and Gas Limited; Rivgal Petroleum and Gas Ltd with China Petroleum & Chemical Corporation (SIVOREC) as technical partners. While the Port-Harcourt Refineries Company Limited (PHRC) went for $561million, the Kaduna Refinery and Petrochemical Company (KRPC) were sold for $160million.

The huge profit being made make from importation of refined products was one of the reasons our refineries were grounded. According to Prof. Sam Aluko, “that on every shipload of oil imported to Nigeria, these people are making $110,000 profit” (The Sun July 2, 2007). A study of the spending on the two refineries in 4 years clearly reveals that they invested the bulk amount of money on maintenance in the last one year of the life of the last administration in order to make the refineries workable with the aim to make huge profit after being sold to themselves. The Obasanjo administration spent $700million out of the $1.1billion between 2006 and early 2007, a clear case of using public wealth to fund private interest.

In Obasanjo’s budget speech of 2000, he states: “We shall make sure that the commanding heights of the economy is run by people who have reason to be in business and who have invested substantially in such ventures to be so identified”. In other words, the business to satisfy the profit greed of a few individuals whose wealth were largely gotten by corrupt enrichment through public resources has become paramount while abandoning the well being of the vast majority.

Those who promote private ownership are yet to explain why many private companies, including blue chip companies collapsed. At least, the collapse of energy giant Enron, Parmalat, Societe Generale Bank, just to mention a few, is still fresh in our memory. Even Arthur Anderson, a management consultancy whose business is to guide private firms on how to best exploit workers businesses was not spared. Besides, the argument that government business is no body’s business and so, workers would ordinarily treat it with levity is most dubious. The so-called government (public) companies lack democratic management and were run in a private manner, which gives room for the collapse. No element of contribution in terms of control supervision, management came from workers who create wealth. Those who run these public companies aground from the presidency to managers at one time or the other are the ones buying them now. For example, the Obasanjo owned Transcorp.

The recent announcement of 12-month of vacation of interest in refineries by of the deal by Dangote and Femi Otedola, who are the major investors, on behalf of Bluestars Consortium is as a result of the public outcry led by the NLC and TUC and some civil society organisations. This goes to show that if the challenges of all neo-liberal policies are politically intensified in an organized manner with the aim of reversing them, victory is sure. Besides, the rejection of the deal does not imply that the Port-Harcourt and Kaduna refineries would not be handed over to other investors, as the federal government is hell-bent on privatisation and other neo-liberal policies.

However, the stance of the labour leaders (NLC and TUC) that suggests that they are only opposed to the manner at which the refineries and some other public utilities were privatized is reductionist. In other words, the labour leaders are not opposed to privatisation but how government goes about privatizing. The labour leaders must reject privatisation and all other neo-liberal policies. They must be living in a dream world to think that if public companies were properly privatized, all would be well. The fact is that the refineries that are privately run in the most advanced capitalist countries are in business for rip off. William Kovacic, a member of the Federal Trade Commission in the US said: “Increased crude oil prices have played a relatively minor role in the increase in retail prices. Also the price of benchmark west Texas crude increased no more than 15 cent a gallon over the last months, while retail gas prices jumped by 80cent to 90cent a gallon”. In the same vain, Republican Congress, Bart Stupak said: “Big oil is often quick to blame world crude oil prices, but the argument does not appear to be the full story. While consumers pay record prices, oil companies are making record profits. Refineries profits have jumped sharply to as much as 70 cents for every gallon of gasoline produced”.

So, the only way out is for labour, pro-people political parties and civil society organisations to struggle for the reversal of the sale of the refineries and other public assets. Campaigns should be intensified as a means of reversing all privatized public institutions. But placing them under the bureaucratic and dictatorial control and management of the government is equally dangerous since it will be marred by corruption. The only way out is for all the refineries and the entire commanding heights of the economy to be placed under democratic control, supervision and management of the working people themselves in order to guarantee the operation of the refineries to serve the interest of the vast majority of Nigerians and not just the privileged few.