Acute scarcity of petroleum products in Nigeria dates back to the early days of oil production in the country. It tends to be frustrating to know that many factors are responsible for the scarcity of petroleum products, however it placates that the solution is always simple- adequate supply of petroleum products to the nation’s fuel service stations.
Nigerians are yet again currently suffering from this problem. Being a former minister of petroleum who understands the complexity of the oil and gas industry in Nigeria, President Buhari is in the best position to find a solution to this problem
There are two ways through which Mr. President can tackle this menace- the short term and the long term. With the presentation of a bill to the National Assembly seeking its approval to spend N413 billion for fuel subsidy payment to oil marketers for their outstanding subsidy claims, President Buhari has solved the crisis in the short term.
The long term solution to the recurrent scarcity of petroleum products in Nigeria is what is critically needed. The long term is double-pronged; complete removal of fuel subsidy and bringing Nigeria’s refinery capacity to what oil refining experts call a high Nelson Complexity Index. A Nelson Complexity Index of 10 or above is indicates a refinery has high potential in value addition and high value products.
Complete removal of subsidy means higher prices. President Buhari may not be quick to remove subsidy because of the resultant harsh economic effects that will affect majority of Nigerians. So, President Buhari may be more tilted towards improving Nigeria’s refining capacity.
With the right approach, coupled with the available cheap and easily accessible crude oil; competent manpower and funds, Nigeria’s refineries would operate at near 100 per cent utilization with minimal downtime. What is that right approach? – effective management of Nigeria’s 5,120km pipelines network, efficient management of the nation’s four refineries and building of new refineries.
The biggest problem facing the oil pipelines in Nigeria are: incessant illegal tapping by oil thieves, sabotage, right-of-way incursions, slow detection of leaks and in-line equipment failure due to inaccessible sites, including the old-fashioned method of managing the pipelines. However, there are advanced technologies that can successfully tackle these problems: SCADA- Supervisory Control and Data Acquisition, Fiber Optic Cable (FOC) and Go-devils /scrapers or Smart pigs (also known as intelligent pigs). SCADA or FOC provide advanced warning in real time which helps pipelines companies to take quick action to protect long-stretch of pipelines network, even if it is located in inaccessible areas where visual inspection might be difficult. The impressive aspect of the SCADA and FOC technologies is that they sense and locate interference before the pipelines damage takes place. Smart pigs are used for detecting anomalies in pipelines or other mechanical damages. As for right of ways incursion, experts argue that the best way to tackle it is via community involvement through sustainable CSR projects and programmes. In addition, a robust standby force is needed to effectively man the security of the pipelines.
Our refineries are not working because of poor management system. Since government will not privatize them, let the government put up effective conditions for their operations: the four refineries should be granted full autonomy to cater for themselves- pay their bills and dividends to the government. When the workers know that the refineries output will determine their take-home pay; things may change.
Buhari being very passionate about reforming the oil and gas sector, he will definitely build more refineries. To increase our refinery capacity, government should go modular, mini and mobile refineries: There are affordable 1,000 bpd – 30,000 bpd Modular refineries whose equipment units are pre-fabricated on skid-mounted structures prior to shipment to any location. If this is done, the only lasting solution to the recurrent scarcity of petroleum would have been found.
Zayyad I. Muhammad writes from Jimeta, Adamawa State, zaymohd@yahoo.com, 08036070980.
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