Dr Abdullahi Mahmud Gaya, chairman of the Committee on Petroleum (Downstream) in the House of Representatives led members of the committee on visits to the Warri and Port Harcourt refineries on oversight duties. The purpose was to find out why the refineries are still moribund and how they can be revived. Gaya who represents the Gaya/Ajingi/Albasu Federal Constituency of Kano State, in the lower arm of the National Assembly, spoke with some journalists after the visits.
Members of your committee were in Warri and Port Harcourt during the week, to visit the refineries in those places. What did you come back with?
We came back with some feelings of sadness and grief that our refineries have been left to rot for all these years. It is really sad that despite the huge amounts that the Federal Government pumped into the refineries, they have remained moribund. It was as a result of this that the Speaker of the House of Representatives, Hon. Femi Gbajabiamila, mandated our committee to interface with the management of the refineries to know what the challenges really are, and what needs to be done to resurrect them. I need to stress here that the Speaker is very much interested in how to make the refineries work again. That is the same spirit that is driving our committee, hence our decision to undertake the recent trips. We have been to the Warri refinery and what we saw was mind blowing, in the negative. We have also been to the Port Harcourt refinery. The situation is virtually the same. We saw refineries that have decayed. At this point, they no longer require maintenance. Rather, I believe, the refineries need to be revamped, a total rehabilitation. A holistic work needs to be done. How this can be achieved will be determined in the course of our interface with all the refineries and then we will compare notes with critical stakeholders and eventually, we will find a solution. Like I said, the House leadership is really desirous of seeing these refineries come back to life. The refineries do not need any turnaround again. Since 2004, they have not done any maintenance of the refineries. Turnaround maintenance is like doing a general check on aircraft and as it is now, we have passed that stage. What we need now is a total rehabilitaiton. We are worried that despite government’s investments, the three refineries have been abandoned. You can imagine the job opportunities that will be created when the refineries are back to life. You can imagine the multiplier effect on the economy. Today, we are still importing refined products and that is capital flight. That is why we must all work assiduously to ensure that the three refineries are revived. We have not visited the Kaduna refinery yet. We will soon go there. In the end, we would have been properly briefed on the challenges or peculiarities with those refineries. But rest assured, we will not sleep until the refineries are made to work again. For us, it is better to borrow and fix the refineries and get them to work and the moment the refineries begin to work again, the loan can be paid back. So, we are on the stage of fact finding. What we have seen and heard already is mind-blowing. We will see more and hear more. We will continue to ask appropriate questions and we will expect honest answers from the people involved. At the end of everything, we will turn in our report and we will know how to move on from there.
When you were at the Port Harcourt refinery, you talked about the mandate given to your committee to investigate the funds spent on Turn Around Maintenance. What have you found out?
The Speaker instructed our committee to exercise oversight function over the downstream sector of the petroleum sector as enshrined in sections 88 and 89 of the 1999 Constitution (as amended). So part of that mandate was for us to investigate the US$396.33 million allegedly spent on the Turn Around Maintenance of the nation’s three refineries. In the course of the visits so far made to Warri and Port Harcourt refineries, some facts are coming out. Like I said, we will soon go to Kaduna and will also get to gather some more information. By the time we are through, if we are not satisfied with our findings we may have to get back on a second round of visits, until we are able to get to the root of the matter. Nigerians should be reminded that this present government detests wastages and acts of graft, no matter who is involved. There is a very urgent need for Nigerians to know what happened to the huge amount of money that was allegedly spent on the turnaround maintenance of refineries that are still moribund. We need to know those who collected the money and what the money was used for. We intend to get to the root of this matter and from there and every other thing will follow.
There is a drop in the price of our crude oil in the international market. What does this mean to you?
The Speaker has taken a very good step by forming a committee made up of the Committee on Petroleum and the Committee on Budget, to study the situation and see what can be done. The ultimate aim is for us to see how we can adjust our budget. The Executive and the Legislature have a common understanding that we need to find ways to rejig the budget. This is something that is unforeseen. Nobody thought the prices would nosedive like this. With the current price of crude oil in the international market, there is no way the budget can be funded based on the projections that were made with the benchmark that was operative at the time. So, we have to do something about the budget.
What lessons do you think we should learn from this as a nation?
It is simple. We need to quickly think of how to diversify the economy. We have been relying on oil for decades and it is from expectations from oil proceeds that we always fund our budget. Revenue from other sources is rarely a part of our budgetary projections.We keep talking about alternative sources of income but we have not really been serious with it. Look at agriculture. I agree that we are making some gains in that area, but it is grossly inadequate for us as a nation. We need to up our game in that area. Who says Nigeria cannot make good gains from tourism? Who says Nigeria cannot generate heavy revenue from solid minerals? For too long, we have depended on crude oil as our mainstay. And ironically, we keep talking about the need to diversify without working out the talk. So, I believe that this is the best time for us as a people to wake up and begin to take much more than a passing interest in other critical revenue sources, like agriculture and solid minerals. The Almighty has so blessed this nation. We have oil, we have a good soil for agriculture and we have solid minerals. We don’t have any reason to begin to panic because of what is going on across the world. I believe that if we do the right things, our country will not necessarily feel the impact of the drop in price of crude oil. But we have to wake up.